Note on Process

In undertaking this comprehensive analysis, the NIC worked
actively with a range of nongovernmental institutions and experts.
We began the analysis with two workshops focusing on drivers
and alternative futures, as the appendix describes. Subsequently,
numerous specialists from academia and the private sector contributed
to every aspect of the study, from demographics to developments
in science and technology, from the global arms market to implications
for the United States. Many of the judgments in this paper derive
from our efforts to distill the diverse views expressed at these
conferences or related workshops. Major conferences cosponsored
by the NIC with other government and private centers in support
of Global Trends 2015 included:

Foreign Reactions to the Revolution in Military Affairs
(Georgetown University).

Evolution of the Nation-State (University of Maryland).

Trends in Democratization (CIA and academic experts).

American Economic Power (Industry & Trade Strategies,
San Francisco, CA).

The Middle East: The Media, Information Technology, and
the Internet (The National Defense University, Fort McNair,
Washington, DC).

Global Migration Trends and Their Implications for the
United States (Carnegie Endowment for International Peace,
Washington, DC).

Alternative Global Futures: 2000-2015 (Department
of State/Bureau of Intelligence and Research and CIA's Global
Futures Project).

In October 2000, the draft report was discussed with outside
experts, including Richard Cooper and Joseph Nye (Harvard University),
Richard Haass (Brookings Institution), James Steinberg (Markle
Foundation), and Jessica Mathews (Carnegie Endowment for International
Peace). Their comments and suggestions are incorporated in the
report. Daniel Yergin (Cambridge Energy Research Associates)
reviewed and commented on the final draft.

Overview

Global Trends 2015: A Dialogue About the Future With Nongovernment
Experts

Over the past 15 months, the National Intelligence Council
(NIC), in close collaboration with US Government specialists
and a wide range of experts outside the government, has worked
to identify major drivers and trends that will shape the world
of 2015.

The key drivers identified are:

(l) Demographics.

(2) Natural resources and environment.

(3) Science and technology.

(4) The global economy and globalization.

(5) National and international governance.

(6) Future conflict.

(7) The role of the United States.

In examining these drivers, several points should be kept
in mind:

No single driver or trend will dominate the global future
in 2015.

Each driver will have varying impacts in different regions
and countries.

The drivers are not necessarily mutually reinforcing; in
some cases, they will work at cross-purposes.

Taken together, these drivers and trends intersect to create
an integrated picture of the world of 2015, about which we can
make projections with varying degrees of confidence and identify
some troubling uncertainties of strategic importance to the United
States.

The Methodology
Global Trends 2015 provides a flexible framework to discuss
and debate the future. The methodology is useful for our purposes,
although admittedly inexact for the social scientist. Our purpose
is to rise above short-term, tactical considerations and provide
a longer-term, strategic perspective. Judgments about demographic
and natural resource trends are based primarily on informed extrapolation
of existing trends. In contrast, many judgments about science
and technology, economic growth, globalization, governance, and
the nature of conflict represent a distillation of views of experts
inside and outside the United States Government. The former are
projections about natural phenomena, about which we can have
fairly high confidence; the latter are more speculative because
they are contingent upon the decisions that societies and governments
will make.

The drivers we emphasize will have staying power. Some of
the trends will persist; others will be less enduring and may
change course over the time frame we consider. The major contribution
of the National Intelligence Council (NIC), assisted by experts
from the Intelligence Community, has been to harness US Government
and nongovernmental specialists to identify drivers, to determine
which ones matter most, to highlight key uncertainties, and to
integrate analysis of these trends into a national security context.
The result identifies issues for more rigorous analysis and quantification.

Revisiting Global Trends 2010: How Our Assessments Have Changed

Over the past four years, we have tested the judgments made
in the predecessor, Global Trends 2010, published in 1997. Global
Trends 2010 was the centerpiece of numerous briefings, conferences,
and public addresses. Various audiences were energetic in challenging,
modifying or confirming our judgments. The lively debate that
ensued has expanded our treatment of drivers, altered some projections
we made in 1997, and matured our thinking overallwhich
was the essential purpose of this exercise.

Global Trends 2015 amplifies several drivers identified previously,
and links them more closely to the trends we now project over
the next 15 years. Some of the key changes include:

Globalization has emerged as a more powerful driver. GT 2015
sees international economic dynamicsincluding developments
in the World Trade Organizationand the spread of information
technology as having much greater influence than portrayed in
GT 2010.

GT 2015 assigns more significance to the importance of governance,
notably the ability of states to deal with nonstate actors, both
good and bad. GT 2015 pays attention both to the opportunities
for cooperation between governments and private organizations
and to the growing reach of international criminal and terrorist
networks.

GT 2015 includes a more careful examination of the likely
role of science and technology as a driver of global developments.
In addition to the growing significance of information technology,
biotechnology and other technologies carry much more weight in
the present assessment.

The effect of the United States as the preponderant power
is introduced in GT 2015. The US role as a global driver has
emerged more clearly over the past four years, particularly as
many countries debate the impact of "US hegemony" on
their domestic and foreign policies.

GT 2015 provides a more complete discussion of natural resources
including food, water, energy, and the environment. It discusses,
for example, the over three billion individuals who will be living
in water-stressed regions from North China to Africa and the
implications for conflict. The linkage between energy availability,
price, and distribution is more thoroughly explored.

GT 2015 emphasizes interactions among the drivers. For example,
we discuss the relationship between S&T, military developments,
and the potential for conflict.

In the regional sections, GT 2015 makes projections about
the impact of the spread of information, the growing power of
China, and the declining power of Russia.

Events and trends in key states and regions over the last
four years have led us to revise some projections substantially
in GT 2015.

GT 2010 did not foresee the global financial crisis of 1997-98;
GT 2015 takes account of obstacles to economic development in
East Asia, though the overall projections remain fairly optimistic.

As described in GT 2010, there is still substantial uncertainty
regarding whether China can cope with internal political and
economic trends. GT 2015 highlights even greater uncertainty
over the direction of Beijing's regional policies.

Many of the global trends continue to remain negative for
the societies and regimes in the Middle East. GT 2015 projects
at best a "cold peace" between Israel and its adversaries
and sees prospects for potentially destabilizing social changes
due to adverse effects of globalization and insufficient attention
to reform. The spike in oil revenues reinforces the assessment
of GT 2010 about the rising demand for OPEC oil; these revenues
are not likely to be directed primarily at core human resources
and social needs.

Projections for Sub-Saharan Africa are even more dire than
in GT 2010 because of the spread of AIDS and the continuing prospects
for humanitarian crises, political instability, and military
conflicts.

The Drivers and Trends

Demographics
World population in 2015 will be 7.2 billion, up from 6.1 billion
in the year 2000, and in most countries, people will live longer.
Ninety-five percent of the increase will be in developing countries,
nearly all in rapidly expanding urban areas. Where political
systems are brittle, the combination of population growth and
urbanization will foster instability. Increasing lifespans will
have significantly divergent impacts.

In the advanced economiesand a growing number of emerging
market countriesdeclining birthrates and aging will combine
to increase health care and pension costs while reducing the
relative size of the working population, straining the social
contract, and leaving significant shortfalls in the size and
capacity of the work force.

In some developing countries, these same trends will combine
to expand the size of the working population and reduce the youth
bulgeincreasing the potential for economic growth and political
stability.

Natural Resources and Environment
Overall food production will be adequate to feed the world's
growing population, but poor infrastructure and distribution,
political instability, and chronic poverty will lead to malnourishment
in parts of Sub-Saharan Africa. The potential for famine will
persist in countries with repressive government policies or internal
conflicts. Despite a 50 percent increase in global energy demand,
energy resources will be sufficient to meet demand; the latest
estimates suggest that 80 percent of the world's available oil
and 95 percent of its gas remain underground.

Although the Persian Gulf region will remain the world's
largest single source of oil, the global energy market is likely
to encompass two relatively distinct patterns of regional distribution:
one serving consumers (including the United States) from Atlantic
Basin reserves; and the other meeting the needs of primarily
Asian customers (increasingly China and India) from Persian Gulf
supplies and, to a lesser extent, the Caspian region and Central
Asia.

In contrast to food and energy, water scarcities and allocation
will pose significant challenges to governments in the Middle
East, Sub-Saharan Africa, South Asia, and northern China. Regional
tensions over water will be heightened by 2015.

Science and Technology
Fifteen years ago, few predicted the profound impact of the revolution
in information technology. Looking ahead another 15 years, the
world will encounter more quantum leaps in information technology
(IT) and in other areas of science and technology. The continuing
diffusion of information technology and new applications of biotechnology
will be at the crest of the wave. IT will be the major building
block for international commerce and for empowering nonstate
actors. Most experts agree that the IT revolution represents
the most significant global transformation since the Industrial
Revolution beginning in the mid-eighteenth century.

The integrationor fusionof continuing revolutions
in information technology, biotechnology, materials science,
and nanotechnology will generate a dramatic increase in investment
in technology, which will further stimulate innovation within
the more advanced countries.

Older technologies will continue lateral "sidewise development"
into new markets and applications through 2015, benefiting US
allies and adversaries around the world who are interested in
acquiring early generation ballistic missile and weapons of mass
destruction (WMD) technologies.

Biotechnology will drive medical breakthroughs that will
enable the world's wealthiest people to improve their health
and increase their longevity dramatically. At the same time,
genetically modified crops will offer the potential to improve
nutrition among the world's one billion malnourished people.

Breakthroughs in materials technology will generate widely
available products that are multi-functional, environmentally
safe, longer lasting, and easily adapted to particular consumer
requirements.

Disaffected states, terrorists, proliferators, narcotraffickers,
and organized criminals will take advantage of the new high-speed
information environment and other advances in technology to integrate
their illegal activities and compound their threat to stability
and security around the world.

The Global Economy and Globalization
The networked global economy will be driven by rapid and largely
unrestricted flows of information, ideas, cultural values, capital,
goods and services, and people: that is, globalization. This
globalized economy will be a net contributor to increased political
stability in the world in 2015, although its reach and benefits
will not be universal. In contrast to the Industrial Revolution,
the process of globalization is more compressed. Its evolution
will be rocky, marked by chronic financial volatility and a widening
economic divide.

The global economy, overall, will return to the high levels
of growth reached in the 1960s and early 1970s. Economic growth
will be driven by political pressures for higher living standards,
improved economic policies, rising foreign trade and investment,
the diffusion of information technologies, and an increasingly
dynamic private sector. Potential brakes on the global economysuch
as a sustained financial crisis or prolonged disruption of energy
suppliescould undo this optimistic projection.

Regions, countries, and groups feeling left behind will face
deepening economic stagnation, political instability, and cultural
alienation. They will foster political, ethnic, ideological,
and religious extremism, along with the violence that often accompanies
it. They will force the United States and other developed countries
to remain focused on "old-world" challenges while concentrating
on the implications of "new-world" technologies at
the same time.

National and International Governance
States will continue to be the dominant players on the world
stage, but governments will have less and less control over flows
of information, technology, diseases, migrants, arms, and financial
transactions, whether licit or illicit, across their borders.
Nonstate actors ranging from business firms to nonprofit organizations
will play increasingly larger roles in both national and international
affairs. The quality of governance, both nationally and internationally,
will substantially determine how well states and societies cope
with these global forces.

States with competent governance, including the United States,
will adapt government structures to a dramatically changed global
environmentmaking them better able to engage with a more
interconnected world. The responsibilities of once "semiautonomous"
government agencies increasingly will intersect because of the
transnational nature of national security priorities and because
of the clear requirement for interdisciplinary policy responses.
Shaping the complex, fast-moving world of 2015 will require reshaping
traditional government structures.

Effective governance will increasingly be determined by the
ability and agility to form partnerships to exploit increased
information flows, new technologies, migration, and the influence
of nonstate actors. Most but not all countries that succeed will
be representative democracies.

States with ineffective and incompetent governance not only
will fail to benefit from globalization, but in some instances
will spawn conflicts at home and abroad, ensuring an even wider
gap between regional winners and losers than exists today.

Globalization will increase the transparency of government
decision-making, complicating the ability of authoritarian regimes
to maintain control, but also complicating the traditional deliberative
processes of democracies. Increasing migration will create influential
diasporas, affecting policies, politics and even national identity
in many countries. Globalization also will create increasing
demands for international cooperation on transnational issues,
but the response of both states and international organizations
will fall short in 2015.

Future Conflict
The United States will maintain a strong technological edge in
IT-driven "battlefield awareness" and in precision-guided
weaponry in 2015. The United States will face three types of
threats:

Asymmetric threats in which state and nonstate adversaries
avoid direct engagements with the US military but devise strategies,
tactics, and weaponssome improved by "sidewise"
technologyto minimize US strengths and exploit perceived
weaknesses;

Strategic WMD threats, including nuclear missile threats,
in which (barring significant political or economic changes)
Russia, China, most likely North Korea, probably Iran, and possibly
Iraq have the capability to strike the United States, and the
potential for unconventional delivery of WMD by both states or
nonstate actors also will grow; and

Regional military threats in which a few countries maintain
large military forces with a mix of Cold War and post-Cold War
concepts and technologies.

The risk of war among developed countries will be low. The
international community will continue, however, to face conflicts
around the world, ranging from relatively frequent small-scale
internal upheavals to less frequent regional interstate wars.
The potential for conflict will arise from rivalries in Asia,
ranging from India-Pakistan to China-Taiwan, as well as among
the antagonists in the Middle East. Their potential lethality
will grow, driven by the availability of WMD, longer-range missile
delivery systems and other technologies.

Internal conflicts stemming from religious, ethnic, economic
or political disputes will remain at current levels or even increase
in number. The United Nations and regional organizations will
be called upon to manage such conflicts because major statesstressed
by domestic concerns, perceived risk of failure, lack of political
will, or tight resourceswill minimize their direct involvement.

Export control regimes and sanctions will be less effective
because of the diffusion of technology, porous borders, defense
industry consolidations, and reliance upon foreign markets to
maintain profitability. Arms and weapons technology transfers
will be more difficult to control.

Prospects will grow that more sophisticated weaponry, including
weapons of mass destructionindigenously produced or externally
acquiredwill get into the hands of state and nonstate belligerents,
some hostile to the United States. The likelihood will increase
over this period that WMD will be used either against the United
States or its forces, facilities, and interests overseas.

Role of the United States
The United States will continue to be a major force in the world
community. US global economic, technological, military, and diplomatic
influence will be unparalleled among nations as well as regional
and international organizations in 2015. This power not only
will ensure America's preeminence, but also will cast the United
States as a key driver of the international system.

The United States will continue to be identified throughout
the world as the leading proponent and beneficiary of globalization.
US economic actions, even when pursued for such domestic goals
as adjusting interest rates, will have a major global impact
because of the tighter integration of global markets by 2015.

The United States will remain in the vanguard of the technological
revolution from information to biotechnology and beyond.

Both allies and adversaries will factor continued US military
pre-eminence in their calculations of national security interests
and ambitions.

Some statesadversaries and allieswill try at
times to check what they see as American "hegemony."
Although this posture will not translate into strategic, broad-based
and enduring anti-US coalitions, it will lead to tactical alignments
on specific policies and demands for a greater role in international
political and economic institutions.

Diplomacy will be more complicated. Washington will have greater
difficulty harnessing its power to achieve specific foreign policy
goals: the US Government will exercise a smaller and less powerful
part of the overall economic and cultural influence of the United
States abroad.

In the absence of a clear and overriding national security
threat, the United States will have difficulty drawing on its
economic prowess to advance its foreign policy agenda. The top
priority of the American private sector, which will be central
to maintaining the US economic and technological lead, will be
financial profitability, not foreign policy objectives.

The United States also will have greater difficulty building
coalitions to support its policy goals, although the international
community will often turn to Washington, even if reluctantly,
to lead multilateral efforts in real and potential conflicts.

There will be increasing numbers of important actors on the
world stage to challenge and checkas well as to reinforceUS
leadership: countries such as China, Russia, India, Mexico, and
Brazil; regional organizations such as the European Union; and
a vast array of increasingly powerful multinational corporations
and nonprofit organizations with their own interests to defend
in the world.

Key Uncertainties: Technology Will Alter Outcomes

Examining the interaction of these drivers and trends points
to some major uncertainties that will only be clarified as events
occur and leaders make policy decisions that cannot be foreseen
today. We cite eight transnational and regional issues for which
the future, according to our trends analysis, is too tough to
call with any confidence or precision.

These are high-stakes, national security issues that will
require continuous analysis and, in the view of our conferees,
periodic policy review in the years ahead.

Science and Technology
We know that the possibility is greater than ever that the revolution
in science and technology will improve the quality of life. What
we know about this revolution is exciting. Advances in science
and technology will generate dramatic breakthroughs in agriculture
and health and in leap-frog applications, such as universal wireless
cellular communications, which already are networking developing
countries that never had land-lines. What we do not know about
the S&T revolution, however, is staggering. We do not know
to what extent technology will benefit, or further disadvantage,
disaffected national populations, alienated ethnic and religious
groups, or the less developed countries. We do not know to what
degree lateral or "side-wise" technology will increase
the threat from low technology countries and groups. One certainty
is that progression will not be linear. Another is that as future
technologies emerge, people will lack full awareness of their
wider economic, environmental, cultural, legal, and moral impactor
the continuing potential for research and development.

Advances in science and technology will pose national security
challenges of uncertain character and scale.

Increasing reliance on computer networks is making critical
US infrastructures more attractive as targets. Computer network
operations today offer new options for attacking the United States
within its traditional continental sanctuarypotentially
anonymously and with selective effects. Nevertheless, we do not
know how quickly or effectively such adversaries as terrorists
or disaffected states will develop the tradecraft to use cyber
warfare tools and technology, or, in fact, whether cyber warfare
will ever evolve into a decisive combat arm.

Rapid advances and diffusion of biotechnology, nanotechnology,
and the materials sciences, moreover, will add to the capabilities
of our adversaries to engage in biological warfare or bio-terrorism.

Asymmetric Warfare
As noted earlier, most adversaries will recognize the information
advantage and military superiority of the United States in 2015.
Rather than acquiesce to any potential US military domination,
they will try to circumvent or minimize US strengths and exploit
perceived weaknesses. IT-driven globalization will significantly
increase interaction among terrorists, narcotraffickers, weapons
proliferators, and organized criminals, who in a networked world
will have greater access to information, to technology, to finance,
to sophisticated deception-and-denial techniques and to each
other. Such asymmetric approacheswhether undertaken by
states or nonstate actorswill become the dominant characteristic
of most threats to the US homeland. They will be a defining challenge
for US strategy, operations, and force development, and they
will require that strategy to maintain focus on traditional,
low-technology threats as well as the capacity of potential adversaries
to harness elements of proliferating advanced technologies. At
the same time, we do not know the extent to which adversaries,
state and nonstate, might be influenced or deterred by other
geopolitical, economic, technological, or diplomatic factors
in 2015.

The Global Economy
Although the outlook for the global economy appears strong, achieving
broad and sustained high levels of global growth will be contingent
on avoiding several potential brakes to growth. These include:

The US economy suffers a sustained downturn. Given
its large trade deficit and low domestic savings, the US economythe
most important driver of recent global growthis vulnerable
to a loss of international confidence in its growth prospects
that could lead to a sharp downturn, which, if long lasting,
would have deleterious economic and policy consequences for the
rest of the world.

Europe and Japan fail to manage their demographic challenges.
European and Japanese populations are aging rapidly, requiring
more than 110 million new workers by 2015 to maintain current
dependency ratios between the working population and retirees.
Conflicts over social services or immigration policies in major
European states could dampen economic growth.

China and/or India fail to sustain high growth. China's
ambitious goals for reforming its economy will be difficult to
achieve: restructuring state-owned enterprises, cleaning up and
transforming the banking system, and cutting the government's
employment rolls in half. Growth would slow if these reforms
go off-track. Failure by India to implement reforms would prevent
it from achieving sustained growth.

Emerging market countries fail to reform their financial
institutions. Many emerging market countries have not yet
undertaken the financial reforms needed to help them survive
the next economic crisis. Absent such reform, a series of future
economic crises in emerging market countries probably will dry
up the capital flows crucial for high rates of economic growth.

Global energy supplies suffer a major disruption. Turbulence
in global energy supplies would have a devastating effect. Such
a result could be driven by conflict among key energy-producing
states, sustained internal instability in two or more major energy-producing
states, or major terrorist actions.

The Middle East
Global trends from demography and natural resources to globalization
and governance appear generally negative for the Middle East.
Most regimes are change-resistant. Many are buoyed by continuing
energy revenues and will not be inclined to make the necessary
reforms, including in basic education, to change this unfavorable
picture.

Linear trend analysis shows little positive change in the
region, raising the prospects for increased demographic pressures,
social unrest, religious and ideological extremism, and terrorism
directed both at the regimes and at their Western supporters.

Nonlinear developmentssuch as the sudden rise of a
Web-connected opposition, a sharp and sustained economic downturn,
or, conversely, the emergence of enlightened leaders committed
to good governancemight change outcomes in individual countries.
Political changes in Iran in the late 1990s are an example of
such nonlinear development.

China
Estimates of developments in China over the next 15 years are
fraught with unknowables. Working against China's aspirations
to sustain economic growth while preserving its political system
is an array of political, social, and economic pressures that
will increasingly challenge the regime's legitimacy, and perhaps
its survival.

The sweeping structural changes required by China's entry
into the World Trade Organization (WTO) and the broader demands
of economic globalization and the information revolution will
generate significantly new levels and types of social and economic
disruption that will only add to an already wide range of domestic
and international problems.

Nevertheless, China need not be overwhelmed by these problems.
China has proven politically resilient, economically dynamic,
and increasingly assertive in positioning itself for a leadership
role in East Asia. Its long-term military program in particular
suggests that Beijing wants to have the capability to achieve
its territorial objectives, outmatch its neighbors, and constrain
US power in the region.

We do not rule out the introduction of enough political reform
by 2015 to allow China to adapt to domestic pressure for change
and to continue to grow economically.

Two conditions, in the view of many specialists, would lead
to a major security challenge for the United States and its allies
in the region: a weak, disintegrating China, or an assertive
China willing to use its growing economic wealth and military
capabilities to pursue its strategic advantage in the region.
These opposite extremes bound a more commonly held view among
experts that China will continue to see peace as essential to
its economic growth and internal stability.

Russia
Between now and 2015, Moscow will be challenged even more than
today to adjust its expectations for world leadership to its
dramatically reduced resources. Whether the country can make
the transition in adjusting ends to means remains an open and
critical question, according to most experts, as does the question
of the character and quality of Russian governance and economic
policies. The most likely outcome is a Russia that remains internally
weak and institutionally linked to the international system primarily
through its permanent seat on the UN Security Council. In this
view, whether Russia can adjust to this diminished status in
a manner that preserves rather than upsets regional stability
is also uncertain. The stakes for both Europe and the United
States will be high, although neither will have the ability to
determine the outcome for Russia in 2015. Russian governance
will be the critical factor.

Japan
The first uncertainty about Japan is whether it will carry out
the structural reforms needed to resume robust economic growth
and to slow its decline relative to the rest of East Asia, particularly
China. The second uncertainty is whether Japan will alter its
security policy to allow Tokyo to maintain a stronger military
and more reciprocal relationship with the United States. Experts
agree that Japanese governance will be the key driver in determining
the outcomes.

India
Global trends conflict significantly in India. The size of its
population1.2 billion by 2015and its technologically
driven economic growth virtually dictate that India will be a
rising regional power. The unevenness of its internal economic
growth, with a growing gap between rich and poor, and serious
questions about the fractious nature of its politics, all cast
doubt on how powerful India will be by 2015. Whatever its degree
of power, India's rising ambition will further strain its relations
with China, as well as complicate its ties with Russia, Japan,
and the Westand continue its nuclear standoff with Pakistan.

Key Challenges to Governance: People Will Decide

Global Trends 2015 identifies governance as a major
driver for the future and assumes that all trends we cite will
be influenced, for good or bad, by decisions of people. The inclusion
of the United States as a driverboth the US Government
as well as US for-profit and nonprofit organizationsis
based on the general assumption that the actions of nonstate
actors as well as governments will shape global outcomes in the
years ahead.

An integrated trend analysis suggests at least four related
conclusions:

National Priorities Will Matter

To prosper in the global economy of 2015, governments will
have to invest more in technology, in public education, and in
broader participation in government to include increasingly influential
nonstate actors. The extent to which governments around the world
are doing these things today gives some indication of where they
will be in 2015.

US Responsibilities Will Cover the World, Old and New

The United States and other developed countries will be challenged
in 2015 to lead the fast-paced technological revolution while,
at the same time, maintaining military, diplomatic, and intelligence
capabilities to deal with traditional problems and threats from
low-technology countries and groups. The United States, as a
global power, will have little choice but to engage leading actors
and confront problems on both sides of the widening economic
and digital divides in the world of 2015, when globalization's
benefits will be far from global.

US Foreign Priorities Will be More Transnational

International or multilateral arrangements increasingly will
be called upon in 2015 to deal with growing transnational problems
from economic and financial volatility; to legal and illegal
migration; to competition for scarce natural resources such as
water; to humanitarian, refugee, and environmental crises; to
terrorism, narcotrafficking, and weapons proliferation; and to
both regional conflicts and cyber threats. And when international
cooperationor international governancecomes up short,
the United States and other developed countries will have to
broker solutions among a wide array of international playersincluding
governments at all levels, multinational corporations, and nonprofit
organizations.

National Governments Will be More Transparent

To deal with a transnational agenda and an interconnected
world in 2015, governments will have to develop greater communication
and collaboration between national security and domestic policy
agencies. Interagency cooperation will be essential to understanding
transnational threats and to developing interdisciplinary strategies
to counter them. Consequence management of a biological warfare
(BW) attack, for example, would require close coordination among
a host of US Government agencies, foreign governments, US state
and municipal governments, the military, the medical community,
and the media.

Discussion

Global Trends 2015: A Dialogue About the Future With Nongovernment
Experts

The international system in 2015 will be shaped by seven global
drivers and related trends: population; natural resources and
the environment; science and technology; the global economy and
globalization; national and international governance; the nature
of conflict; and the role of the United States. These trends
will influence the capacities, priorities, and behavior of states
and societies and thus substantially define the international
security environment.

Population Trends

The world in 2015 will be populated by some 7.2 billion people,
up from 6.1 billion in the year 2000. The rate of world population
growth, however, will have diminished from 1.7 percent annually
in 1985, to 1.3 percent today, to approximately 1 percent in
2015.

Increased life expectancy and falling fertility rates will
contribute to a shift toward an aging population in high-income
developed countries. Beyond that, demographic trends will sharply
diverge. More than 95 percent of the increase in world population
will be found in developing countries, nearly all in rapidly
expanding urban areas.

India's population will grow from 900 million to more than
1.2 billion by 2015; Pakistan's probably will swell from 140
million now to about 195 million.

Some countries in Africa with high rates of AIDS will experience
reduced population growth or even declining populations despite
relatively high birthrates. In South Africa, for example, the
population is projected to drop from 43.4 million in 2000 to
38.7 million in 2015.

Russia and many post-Communist countries of Eastern Europe
will have declining populations. As a result of high mortality
and low birthrates, Russia's population may drop from its current
146 million to as low as 130 to 135 million in 2015, while the
neighboring states of Central Asia will experience continued
population growth. In Japan and West European countries such
as Italy and Spain, populations also will decline in the absence
of dramatic increases in birthrates or immigration.

North America, Australia, and New Zealandthe traditional
magnets for migrantswill continue to have the highest rates
of population growth among the developed countries, with annual
population growth rates between 0.7 percent and 1.0 percent.

Divergent Aging Patterns
In developed countries and many of the more advanced developing
countries, the declining ratio of working people to retirees
will strain social services, pensions, and health systems. Governments
will seek to mitigate the problem through such measures as delaying
retirement, encouraging greater participation in the work force
by women, and relying on migrant workers. Dealing effectively
with declining dependency ratios is likely to require more extensive
measures than most governments will be prepared to undertake.
The shift towards a greater proportion of older voters will change
the political dynamics in these countries in ways difficult to
foresee.

At the same time, "youth bulges" will persist in
some developing countries, notably in Sub-Saharan Africa and
a few countries in Latin America and the Middle East. A high
proportion of young people will be destabilizing, particularly
when combined with high unemployment or communal tension.

Movement of People
Two major trends in the movement of people will characterize
the next 15 yearsurbanization and cross-border migrationeach
of which poses both opportunities and challenges.

The ratio of urban to rural dwellers is steadily increasing.
By 2015 more than half of the world's population will be urban.
The number of people living in mega-citiesthose containing
more than 10 million inhabitantswill double to more than
400 million.

Urbanization will provide many countries the opportunity
to tap the information revolution and other technological advances.

The explosive growth of cities in developing countries will
test the capacity of governments to stimulate the investment
required to generate jobs and to provide the services, infrastructure,
and social supports necessary to sustain livable and stable environments.

Divergent demographic trends, the globalization of labor markets,
and political instability and conflict will fuel a dramatic increase
in the global movement of people through 2015. Legal and illegal
migrants now account for more than 15 percent of the population
in more than 50 countries. These numbers will grow substantially
and will increase social and political tension and perhaps alter
national identities even as they contribute to demographic and
economic dynamism.

States will face increasing difficulty in managing migration
pressures and flows, which will number several million people
annually. Over the next 15 years, migrants will seek to move:

To North America primarily from Latin America and East and
South Asia.

To Europe primarily from North Africa and the Middle East,
South Asia, and the post-Communist states of Eastern Europe and
Eurasia.

From the least to the most developed countries of Asia, Latin
America, the Middle East, and Sub-Saharan Africa.

For high-income receiving countries, migration will
relieve labor shortages and otherwise ensure continuing economic
vitality. EU countries and Japan will need large numbers of new
workers because of aging populations and low birthrates. Immigration
will complicate political and social integration: some political
parties will continue to mobilize popular sentiment against migrants,
protesting the strain on social services and the difficulties
in assimilation. European countries and Japan will face difficult
dilemmas in seeking to reconcile protection of national borders
and cultural identity with the need to address growing demographic
and labor market imbalances.

For low-income receiving countries, mass migration
resulting from civil conflict, natural disasters, or economic
crises will strain local infrastructures, upset ethnic balances,
and spark ethnic conflict. Illegal migration will become a more
contentious issue between and among governments.

For low-income sending countries, mass migration will
relieve pressures from unemployed and underemployed workers and
generate significant remittances. Migrants will function as ethnic
lobbies on behalf of sending-country interests, sometimes supporting
armed conflicts in their home countries, as in the cases of the
Albanian, Kurdish, Tamil, Armenian, Eritrean, and Ethiopian diasporas.
At the same time, emigration increasingly will deprive low-income
sending countries of their educated elites. An estimated 1.5
million skilled expatriates from developing countries already
are employed in high-income countries. This brain drain from
low-income to high-income countries is likely to intensify over
the next 15 years.

Health
Disparities in health status between developed and developing
countriesparticularly the least developed countrieswill
persist and widen. In developed countries, major inroads against
a variety of maladies will be achieved by 2015 as a result of
generous health spending and major medical advances. The revolution
in biotechnology holds the promise of even more dramatic improvements
in health status. Noninfectious diseases will pose greater challenges
to health in developed countries than will infectious diseases.
Progress against infectious diseases, nevertheless, will encounter
some setbacks as a result of growing microbial resistance to
antibiotics and the accelerating pace of international movement
of people and products that facilitate the spread of infectious
diseases.

AIDS will be a major problem not only in Africa but also in
India, Southeast Asia, several countries formerly part of the
Soviet Union, and possibly China.

AIDS will reduce economic growth by up to 1 percent of GDP
per year and consume more than 50 percent of health budgets in
the hardest-hit countries.

AIDS and such associated diseases as TB will have a destructive
impact on families and society. In some African countries, average
lifespans will be reduced by as much as 30 to 40 years, generating
more than 40 million orphans and contributing to poverty, crime,
and instability.

AIDS, other diseases, and health problems will hurt prospects
for transition to democratic regimes as they undermine civil
society, hamper the evolution of sound political and economic
institutions, and intensify the struggle for power and resources.

Natural Resources and Environment

Food
Driven by advances in agricultural technologies, world food grain
production and stocks in 2015 will be adequate to meet the needs
of a growing world population. Despite the overall adequacy of
food, problems of distribution and availability will remain.

The number of chronically malnourished people in conflict-ridden
Sub-Saharan Africa will increase by more than 20 percent over
the next 15 years.

The potential for famine will still exist where the combination
of repressive government or internal conflict and persistent
natural disasters prevents or limits relief efforts, as in Somalia
in the early 1990s and North Korea more recently.

Donors will become more reluctant to provide relief when
the effort might become embroiled in military conflict.

The use of genetically modified crops has great potential
for meeting the nutrition needs of the poor in developing countries.
Popular and political opposition in the EU countries and, to
a lesser extent, in the United States, however, has clouded the
prospects for applying this technology.

Water
By 2015 nearly half the world's populationmore than 3 billion
peoplewill live in countries that are "water-stressed"have
less than 1,700 cubic meters of water per capita per yearmostly
in Africa, the Middle East, South Asia, and northern China.

In the developing world, 80 percent of water usage goes into
agriculture, a proportion that is not sustainable; and in 2015
a number of developing countries will be unable to maintain their
levels of irrigated agriculture. Overpumping of groundwater in
many of the world's important grain-growing regions will be an
increasing problem; about 1,000 tons of water are needed to produce
a ton of grain.

The water table under some of the major grain-producing areas
in northern China is falling at a rate of five feet per year,
and water tables throughout India are falling an average of 3-10
feet per year.

Measures undertaken to increase water availability and to
ease acute water shortagesusing water more efficiently,
expanding use of desalinization, developing genetically modified
crops that use less water or more saline water, and importing
waterwill not be sufficient to substantially change the
outlook for water shortages in 2015. Many will be expensive;
policies to price water more realistically are not likely to
be broadly implemented within the next 15 years, and subsidizing
water is politically sensitive for the many low-income countries
short of water because their populations expect cheap water.

Water has been a source of contention historically, but no
water dispute has been a cause of open interstate conflict; indeed,
water shortages often have stimulated cooperative arrangements
for sharing the scarce resource. But as countries press against
the limits of available water between now and 2015, the possibility
of conflict will increase.

Nearly one-half of the world's land surface consists of river
basins shared by more than one country, and more than 30 nations
receive more than one-third of their water from outside their
borders.

Turkey is building new dams and irrigation projects on the
Tigris and Euphrates Rivers, which will affect water flows into
Syria and Iraqtwo countries that will experience considerable
population growth.

Egypt is proceeding with a major diversion of water from
the Nile, which flows from Ethiopia and Sudan, both of which
will want to draw more water from the Nile for their own development
by 2015. Water-sharing arrangements are likely to become more
contentious.

Water shortages occurring in combination with other sources
of tensionsuch as in the Middle Eastwill be the most
worrisome.

Energy
The global economy will continue to become more energy efficient
through 2015. Traditional industries, as well as transportation,
are increasingly efficient in their energy use. Moreover, the
most dynamic growth areas in the global economy, especially services
and the knowledge fields, are less energy intensive than the
economic activities that they replace. Energy production also
is becoming more efficient. Technological applications, particularly
in deep-water exploration and production, are opening remote
and hostile areas to petroleum production.

Sustained global economic growth, along with population increases,
will drive a nearly 50 percent increase in the demand for energy
over the next 15 years. Total oil demand will increase from roughly
75 million barrels per day in 2000 to more than 100 million barrels
in 2015, an increase almost as large as OPEC's current production.
Over the next 15 years, natural gas usage will increase more
rapidly than that of any other energy sourceby more than
100 percentmainly stemming from the tripling of gas consumption
in Asia.

Asia will drive the expansion in energy demand, replacing
North America as the leading energy consumption region and accounting
for more than half of the world's total increase in demand.

China, and to a lesser extent India, will see especially
dramatic increases in energy consumption.

By 2015, only one-tenth of Persian Gulf oil will be directed
to Western markets; three-quarters will go to Asia.

Fossil fuels will remain the dominant form of energy despite
increasing concerns about global warming. Efficiency of solar
cells will improve, genetic engineering will increase the long-term
prospects for the large-scale use of ethanol, and hydrates will
be used increasingly as fuels. Nuclear energy use will remain
at current levels.

Meeting the increase in demand for energy will pose neither
a major supply challenge nor lead to substantial price increases
in real terms. Estimates of the world's total endowment of oil
have steadily increased as technological progress in extracting
oil from remote sources has enabled new discoveries and more
efficient production. Recent estimates indicate that 80 percent
of the world's available oil still remains in the ground, as
does 95 percent of the world's natural gas.

The Persian Gulf regionabsent a major warwill
see large increases in oil production capacity and will rise
in its overall importance to the world energy market. Other areas
of the worldincluding Russia, coastal West Africa, and
Greenlandwill also increase their role in global energy
markets. Russia and the Middle East account for three-quarters
of known gas reserves.

Latin Americaprincipally Venezuela, Mexico, and Brazilhas
more than 117 billion barrels of proven oil reserves and potentially
114 billion barrels of undiscovered oil, according to the US
Geological Survey. With foreign participation, Latin American
production could increase from 9 million barrels per day to more
than 14 million.

Caspian energy development is likely to be in high gear by
2015. New transport routes for Caspian oil and gas exports that
do not transit Russia will be operating.

Oil-producing countries will continue to exert leverage on
the market to increase prices but are unlikely to achieve stable
high prices. Energy prices are likely to become more unstable
in the next 15 years, as periodic price hikes are followed by
price collapses.

By 2015, global energy markets will have coalesced into two
quasi-hemispheric patterns. Asia's energy needs will be met either
through coal from the region or from oil and gas supplies from
the Persian Gulf, Central Asia, and Russia. Western Europe and
the Western Hemisphere will draw on the Atlantic Basin for their
energy sources at world prices.

Environment
Contemporary environmental problems will persist and in many
instances grow over the next 15 years. With increasingly intensive
land use, significant degradation of arable land will continue
as will the loss of tropical forests. Given the promising global
economic outlook, greenhouse gas emissions will increase substantially.
The depletion of tropical forests and other species-rich habitats,
such as wetlands and coral reefs, will exacerbate the historically
large losses of biological species now occurring.

Environmental issues will become mainstream issues in several
countries, particularly in the developed world. The consensus
on the need to deal with environmental issues will strengthen;
however, progress in dealing with them will be uneven.

The outlook to 2015 is mixed for such localized environmental
problems as high concentrations of ozone and noxious chemicals
in the air and the pollution of rivers and lakes by industrial
and agricultural wastes.

Developed countries will continue to manage these local environmental
issues, and such issues are unlikely to constitute a major constraint
on economic growth or on improving health standards.

The developing countries, however, will face intensified
environmental problems as a result of population growth, economic
development, and rapid urbanization. An increasing number of
cities will face the serious air and water quality problems that
already are troubling in such urban centers as Mexico City, Sao
Paulo, Lagos, and Beijing.

Russia and Ukraine will struggle with problems stemming from
decades of environmental neglect and abuse, including widespread
radioactive pollution from badly managed nuclear facilities.
These problems are unlikely to be adequately addressed. As these
countries pursue economic growth, they will devote insufficient
resources to environmental remediation.

Central and Eastern European countries face similar problems
as a result of the legacy of environmental neglect from the Communist
era; nevertheless, driven by their desire to gain EU membership,
several will become more effective in addressing these problems
and will upgrade their environmental standards.

Some existing agreements, even when implemented, will not
be able by 2015 to reverse the targeted environmental damage
they were designed to address. The Montreal Protocol is on track
to restore the stratospheric ozone layer over the next 50 years.
Nevertheless, the seasonal Antarctic ozone hole will expand for
the next two decadesincreasing the risk of skin cancer
in countries like Australia, Argentina, and Chilebecause
of the long lag time between emission reductions and atmospheric
effects. Important new agreements will be implemented, including,
for example, a global treaty to control the worldwide spread
of such persistent organic chemicals as DDT and dioxins. Other
agreements, such as the Convention on Biodiversity, will fall
short in meeting their objectives.

Over the next 15 years the pressures on the environment as
a result of economic growth will decrease as a result of less
energy-intensive economic development and technological advances.
For example, increased use of fuel cells and hybrid engines is
likely to reduce the rate of increase in the amount of pollution
produced, particularly in the transportation sector. Also, increases
in the utilization of solar and wind power, advances in the efficiency
of energy use, and a shift toward less polluting fuels, such
as natural gas, will contribute to this trend.

Global warming will challenge the international community
as indications of a warming climatesuch as meltbacks of
polar ice, sea level rise, and increasing frequency of major
stormsoccur. The Kyoto Protocol on Climate Change, which
mandates emission-reduction targets for developed countries,
is unlikely to come into force soon or without substantial modification.
Even in the absence of a formal treaty, however, some incremental
progress will be made in reducing the growth of greenhouse gas
emissions.

Both India and China will actively explore less carbon-intensive
development strategies, although they will resist setting targets
or timetables for carbon dioxide emission limits.

A number of major firms operating internationally will take
steps to reduce greenhouse gas emissions.

Science and Technology

The continuing diffusion of information technology and new
applications in the biotechnology field will be of particular
global significance. Two major trends will continue:

The integration of existing disciplines to form new ones.
The integration of information technology, biotechnology, materials
sciences, and nanotechnology will generate a dramatic increase
in innovation. The effects will be profound on business and commerce,
public health, and safety.

The lateral development of technology. Older established
technologies will continue "sidewise" development into
new markets and applications, for example, developing innovative
applications for "old" computer chips.

The time between the discovery and the application of scientific
advances will continue to shorten. Developments in the laboratory
will reach commercial production at ever faster rates, leading
to increased investments.

Information Technology (IT)
Over the next 15 years, a wide range of developments will lead
to many new IT-enabled devices and services. Rapid diffusion
is likely because equipment costs will decrease at the same time
that demand is increasing. Local-to-global Internet access holds
the prospect of universal wireless connectivity via hand-held
devices and large numbers of low-cost, low-altitude satellites.
Satellite systems and services will develop in ways that increase
performance and reduce costs.

By 2015, information technology will make major inroads in
rural as well as urban areas around the globe. Moreover, information
technology need not be widespread to produce important effects.
The first information technology "pioneers" in each
society will be the local economic and political elites, multiplying
the initial impact.

Some countries and populations, however, will fail to benefit
much from the information revolution.

Among developing countries, India will remain in the forefront
in developing information technology, led by the growing class
of high-tech workers and entrepreneurs.

China will lead the developing world in utilizing information
technology, with urban areas leading the countryside. Beijing's
capacity to control or shape the content of information, however,
is likely to be sharply reduced.

Although most Russian urban-dwellers will adopt information
technologies well before 2015, the adoption of such technologies
will be slow in the broader population.

Latin America's Internet market will grow exponentially.
Argentina, Mexico, and Brazil will accrue the greatest benefits
because of larger telecommunications companies, bigger markets,
and more international investment.

In Sub-Saharan Africa, South Africa is best positioned to
make relatively rapid progress in IT.

Societies with advanced communications generally will worry
about threats to individual privacy. Others will worry about
the spread of "cultural contamination." Governments
everywhere will be simultaneously asked to foster the diffusion
of IT while controlling its "harmful" effects.

Biotechnology
By 2015, the biotechnology revolution will be in full swing with
major achievements in combating disease, increasing food production,
reducing pollution, and enhancing the quality of life. Many of
these developments, especially in the medical field, will remain
costly through 2015 and will be available mainly in the West
and to wealthy segments of other societies. Some biotechnologies
will continue to be controversial for moral and religious reasons.
Among the most significant developments by 2015 are:

Genomic profilingby decoding the genetic basis
for pathologywill enable the medical community to move
beyond the description of diseases to more effective mechanisms
for diagnosis and treatment.

Biomedical engineering, exploiting advances in biotechnology
and "smart" materials, will produce new surgical procedures
and systems, including better organic and artificial replacement
parts for human beings, and the use of unspecialized human cells
(stem cells) to augment or replace brain or body functions and
structures. It also will spur development of sensor and neural
prosthetics such as retinal implants for the eye, cochlear implants
for the ear, or bypasses of spinal and other nerve damage.

Therapy and drug developments will cure some enduring
diseases and counter trends in antibiotic resistance. Deeper
understanding of how particular diseases affect people with specific
genetic characteristics will facilitate the development and prescription
of custom drugs.

Genetic modificationdespite continuing technological
and cultural barrierswill improve the engineering of organisms
to increase food production and quality, broaden the scale of
bio-manufacturing, and provide cures for certain genetic diseases.
Cloning will be used for such applications as livestock production.
Despite cultural and political concerns, the use of genetically
modified crops has great potential to dramatically improve the
nutrition and health of many of the world's poorest people.

DNA identification will continue to improve law enforcement
capabilities.

Other Technologies
Breakthroughs in materialstechnology will generate
widely available products that are smart, multifunctional, environmentally
compatible, more survivable, and customizable. These products
not only will contribute to the growing information and biotechnology
revolutions but also will benefit manufacturing, logistics, and
personal lifestyles. Materials with active capabilities will
be used to combine sensing and actuation in response to environmental
conditions.

Discoveries in nanotechnology will lead to unprecedented
understanding and control over the fundamental building blocks
of all physical things. Developments in this emerging field are
likely to change the way almost everythingfrom vaccines
to computers to automobile tires to objects not yet imaginedis
designed and made. Self-assembled nanomaterials, such as semiconductor
"quantum dots," could by 2015 revolutionize chemical
labeling and enable rapid processing for drug discovery, blood
content analysis, genetic analysis, and other biological applications.

The Global Economy

The global economy is well-positioned to achieve a sustained
period of dynamism through 2015. Global economic growth will
return to the high levels reached in the 1960s and early 1970s,
the final years of the post-World War II "long boom."
Dynamism will be strongest among so-called "emerging markets"especially
in the two Asian giants, China and Indiabut will be broadly
based worldwide, including in both industrialized and many developing
countries. The rising tide of the global economy will create
many economic winners, but it will not lift all boats. The information
revolution will make the persistence of poverty more visible,
and regional differences will remain large.

Dynamism and Growth
Five factors will combine to promote widespread economic dynamism
and growth:

Political pressures for higher living standards. The
growing global middle classnow 2 billion strongis
creating a cycle of rising aspirations, with increased information
flows and the spread of democracy giving political clout to formerly
disenfranchised citizens.

Improved macroeconomic policies. The widespread improvement
in recent years in economic policy and management sets the stage
for future dynamism. Inflation rates have been dramatically lowered
across a wide range of economies. The abandonment of unsustainable
fixed exchange rate regimes in Asia and the creation of the European
Monetary Union (EMU) will contribute to economic growth.

Rising trade and investment. International trade and
investment flows will grow, spurring rapid increases in world
GDP. Opposition to further trade liberalization from special
interest groups and some governments will not erode the basic
trend toward expansion of trade. International capital flows,
which have risen dramatically in the past decade, will remain
plentiful, especially for emerging market countries that increase
their transparency.

Diffusion of information technology. The pervasive
incorporation of information technologies will continue to produce
significant efficiency gains in the US economy. Similar gains
will be witnessedalbeit in varying degreesin numerous
other countries as the integration of these technologies proceeds.
But the absorption of IT and its benefits will not be automatic
because many countries will fail to meet the conditions needed
for effective IT utilizationhigh educational levels, adequate
infrastructure, and appropriate regulatory policies.

Increasingly dynamic private sectors. Rapid expansion
of the private sector in many emerging market countriesalong
with deregulation and privatization in Europe and Japanwill
spur economic growth by generating competitive pressures to use
resources more efficiently. The impact of improved efficiencies
will be multiplied as the information revolution enhances the
ability of firms around the world to learn "best practices"
from the most successful enterprises. Indeed, the world may be
on the verge of a rapid convergence in market-based financial
and business practices.

Unequal Growth Prospects and Distribution
The countries and regions most at risk of falling behind economically
are those with endemic internal and/or regional conflicts and
those that fail to diversify their economies. The economies of
most states in Sub-Saharan Africa and the Middle East and some
in Latin America will continue to suffer. A large segment of
the Eurasian landmass extending from Central Asia through the
Caucasus to parts of southeastern Europe faces dim economic prospects.
Within countries, the gap in the standard of living also will
increase. Even in rapidly growing countries, large regions will
be left behind.

Emerging Asia will be the fastest growing region, led
by breakout candidates China and India, whose economies already
comprise roughly one-sixth of global GDP. To the degree that
China implements reforms mandated by its entry into the World
Trade Organization, its economy will become more efficient, enabling
rapid growth to continue. China's economic development, however,
will be mainly in the dynamic coastal provinces. Agricultural
provinces in northern and western China will lag behind, causing
social tensions that Beijing will be challenged to manage. India's
relatively strong educational system, democracy, and English-language
skills position it well to take advantage of gains related to
information technology. India nevertheless faces enormous challenges
in spreading the benefits of growth to hundreds of millions of
impoverished, often illiterate citizens, particularly in the
northern states.

In Europe and Japan, the picture is mixed. Western
Europe is likely to narrow what has been a growing economic
performance gap with the United States, and Eastern European
countries, eager for EU membership, generally will adopt reform
policies and grow apace. South-Eastern Europe will improve
economic prospects only gradually as it improves regional security.
Although Japan's economic performance in the next 15 years
will be stronger than that of the 1990s, its relative importance
in the global economy will decrease. Economic prospects for Russia
and Eurasia are not promising.

Latin America will manage fairly rapid aggregate growth,
but it will be spread unevenly across the region. The market-oriented
democracies in Mexico and the southern cone will lead the way.
A new generation of entrepreneurs will be inclined to favor additional
market openings, but the benefits may further distort income
distribution, already the most inequitable in the world. Elsewhere,
the Andean region will struggle with a poorly educated labor
force, unstable governance, and dependence upon commodities such
as oil, copper, and narcotics.

The Middle East and North Africa will be marked by
increasing internal differentiation as some countries respond
more effectively to the challenges of globalization or to the
uncertainties of closer integration with the EU while others
lag. In Sub-Saharan Africa, persistent conflicts and instability,
autocratic and corrupt governments, overdependence on commodities
with declining real prices, low levels of education, and widespread
infectious diseases will combine to prevent most countries from
experiencing rapid economic growth.

The Role of Education

Education will be determinative of success in 2015 at both
the individual and country levels. The globalizing economy and
technological change inevitably place an increasing premium on
a more highly skilled labor force. Adult literacy and school
enrollments will increase in almost all countries. The educational
gender gap will narrow and probably will disappear in East and
Southeast Asia and Latin America.

Progress will vary among regions, countries, and social groups,
triggering increased income inequalities within as well as among
countries.

School enrollments will decline in the most highly impoverished
countries, in those affected by serious internal conflicts, and
in those with high rates of infectious diseases.

Economic Crises and Resilience
The global economy will be prone to periodic financial crises,
but its capacity to correct itself will remain strong. The rapid
rebound from the global financial crisis of 1997-98, the limited
impact of the recent tripling of oil prices on global economic
growth, and the successful management of the "Y2K"
problem are the most recent manifestations of resilience. Nonetheless,
economic liberalization and globalization entail risks and inevitably
will create bumps in the road, some of them potentially highly
disruptive.

Economic crises will recur. The trends toward free
markets and deregulation will allow financial markets to overshoot,
increase the possibility for sudden reversal in sentiment, and
expose individual countries to broad swings in the global market.
Any of these could trigger a financial crisis.

Turbulence in one economy will affect others. Increased
trade links and the integration of global financial markets will
quickly transmit turmoil in one economy regionally and internationally,
as Russia's financial turmoil in 1998 affected Brazil.

Disputes over international economic rules. The Asian
financial crisis revealed differences among countries regarding
global financial architecture. As emerging market countries continue
to grow, they will seek a stronger voice in setting the terms
of international economic governance. A lack of consensus could
at times make financial markets skittish and undermine growth.

Alternative Trajectories

Although the outlook for the global economy appears quite
strong, achieving sustained high levels of global growth will
be contingent on avoiding several potential brakes to growth.
Five are described below.

The US economy suffers a sustained downturn. Given
the large trade deficit and low domestic savings, the US economythe
most important driver of recent global growthis vulnerable
to loss of international confidence in its growth prospects that
could lead to a sharp downturn, which, if long-lasting, would
have deleterious economic and policy consequences for the rest
of the world. Key trading partners would suffer as the world's
largest market contracted, and international financial markets
might face profound instability.

Europe and Japan fail to manage their demographic challenges.
European and Japanese populations are aging rapidly, requiring
more than 110 million new workers by 2015 to maintain current
dependency ratios between the working population and retirees.
For these countries, immigration is a controversial means of
meeting these labor force requirements. Conflicts over the social
contract or immigration policies in major European states could
dampen economic growth. Japan faces an even more serious labor
force shortage and its strategies for respondingenticing
overseas Japanese to return, broadening the opportunities for
women, and increasing investments elsewhere in Asiamay
prove inadequate. If growth in Europe and Japan falters, the
economic burden on the US economy would increase, weakening the
overall global outlook.

China and/or India fail to sustain high growth. China's
ambitious goals for reforming its economy will be difficult to
realize: restructuring state-owned enterprises, cleaning up and
transforming the banking system, cutting the government's employment
rolls in half, and opening up the economy to greater foreign
competition. Growth would slow if these reforms go awry, which,
in turn, would exacerbate bureaucratic wrangling and increase
opposition to the reform agenda. India's reform driveessential
to sustained economic growthcould be sidetracked by social
divisions and by the bureaucratic culture of the public service.

Emerging market countries fail to reform their financial
institutions. Although most emerging market countries bounced
back from the 1997-98 financial crisis more quickly than expected,
many have not yet undertaken the financial reforms needed to
help them survive the next economic crisis. Absent such reform,
a series of future economic crises in emerging market countries
could dry up the capital flows crucial for high rates of economic
growth.

Global energy supplies are disrupted in a major way.
Although the world economy is less vulnerable to energy price
swings than in the 1970s, a major disruption in global energy
supplies still would have a devastating effect. Conflict among
key energy-producing states, sustained internal instability in
two or more major energy-producing states, or major terrorist
actions could lead to such a disruption.

National and International Governance

The state will remain the single most important organizing
unit of political, economic, and security affairs through 2015
but will confront fundamental tests of effective governance.
The first will be to benefit from, while coping with, several
facets of globalization. The second will be to deal with increasingly
vocal and organized publics.

The elements of globalizationgreater and freer flow
of information, capital, goods, services, people, and the diffusion
of power to nonstate actors of all kindswill challenge
the authority of virtually all governments. At the same time,
globalization will create demands for increased international
cooperation on transnational issues.

All states will confront popular demands for greater participation
in politics and attention to civil rightspressures that
will encourage greater democratization and transparency. Twenty-five
years ago less than a third of states were defined as democracies
by Freedom House; today more than half of states are considered
democracies, albeit with varying combinations of electoral and
civil or political rights. The majority of states are likely
to remain democracies in some sense over the next 15 years, but
the number of new democracies that are likely to develop is uncertain.

Successful states will interact with nonstate actors to manage
authority and share responsibility. Between now and 2015, three
important challenges for states will be:

Managing relations with nonstate actors;

Combating criminal networks; and

Responding to emerging and dynamic religious and ethnic groups.

Nonstate Actors
States continually will be dealing with private-sector organizationsboth
for-profit and nonprofit. These nonstate actors increasingly
will gain resources and power over the next 15 years as a result
of the ongoing liberalization of global finance and trade, as
well as the opportunities afforded by information technology.

The For-profit Sector. The for-profit business sector
will grow rapidly over the next 15 years, spearheading legal
and judicial reform and challenging governments to become more
transparent and predictable. At the same time, governments will
be challenged to monitor and regulate business firms through
measures consistent with local standards of social welfare.

Multinational corporationsnow numbering more than 50,000
with nearly one-half million affiliateshave multiplied
in recent years as governments have deregulated their economies,
privatized state-owned enterprises, and liberalized financial
markets and trade. This trend will continue.

Medium-sized, mostly local firms will multiply in many countries,
driven by the shift away from Communism and other socialist models
and the broadening of financial services and banking systems.
Micro-enterprises also will multiply, not only because of deregulation
and liberalization, but also because many states will have a
declining capacity to stymie small-scale commercial activities.
As medium-sized and small businesses become more numerous, they
will encourage, and then link into, various global networks.

The Nonprofit Sector. Nonprofit networks with affiliates
in more than one country will grow through 2015, having expanded
more than 20-fold between 1964 and 1998. Within individual countries,
the nonprofit sector also will expand rapidly.

The Role of the Nonprofit Sector

Nonprofit organizations deliver critical services to individuals
and private groups, with 67 percent of nonprofit activities in
health, education, and social services alone. They provide information
and expertise, advocate policies on behalf of their interests,
and work through international organizations, both as implementing
partners and as advocates. In many development projects and humanitarian
emergencies, nonprofits will continue to deliver most of the
aid from governments and international organizations.

Over the next 15 years international and national nonprofits
will not only expand but change in significant ways.

Nonprofit organizations will have more resources to expand
their activities and will become more confident of their power
and more confrontational. Nonprofits will move beyond delivering
services to the design and implementation of policies, whether
as partners or competitors with corporations and governments.

Western preponderance will persist but at a declining level
as economic growth in Asia and Latin America produces additional
resources for support of civil society. In addition, autocratic
governments and Islamic states or groups will increasingly support
nonprofit groups sympathetic to their interests.

Nonprofit organizations will be expected to meet codes of
conduct. Governments and corporationswhich are increasingly
held to standards of transparency and accountabilitywill,
in turn, expect nonprofits to meet similar standards.

Criminal Organizations and Networks
Over the next 15 years, transnational criminal organizations
will become increasingly adept at exploiting the global diffusion
of sophisticated information, financial, and transportation networks.

Criminal organizations and networks based in North America,
Western Europe, China, Colombia, Israel, Japan, Mexico, Nigeria,
and Russia will expand the scale and scope of their activities.
They will form loose alliances with one another, with smaller
criminal entrepreneurs, and with insurgent movements for specific
operations. They will corrupt leaders of unstable, economically
fragile or failing states, insinuate themselves into troubled
banks and businesses, and cooperate with insurgent political
movements to control substantial geographic areas. Their income
will come from narcotics trafficking; alien smuggling; trafficking
in women and children; smuggling toxic materials, hazardous wastes,
illicit arms, military technologies, and other contraband; financial
fraud; and racketeering.

The risk will increase that organized criminal groups will
traffic in nuclear, biological, or chemical weapons. The degree
of risk depends on whether governments with WMD capabilities
can or will control such weapons and materials.

Crime and Corruption Pay

Available data suggest that current annual revenues from illicit
criminal activities include: $100-300 billion from narcotics
trafficking; $10-12 billion from toxic and other hazardous waste
dumping; $9 billion from automobile theft in the United States
and Europe; $7 billion from alien smuggling; and as much as $1
billion from theft of intellectual property through pirating
of videos, software, and other commodities.

Available estimates suggest that corruption costs about $500
billionor about 1 percent of global GNP in slower
growth, reduced foreign investment, and lower profits. For example,
the average cost of bribery to firms doing business in Russia
is between 4 and 8 percent of annual revenue, according to the
European Bank for Reconstruction and Development.

Changing Communal Identities and Networks
Traditional communal groupswhether religious or ethnic-linguistic
groupswill pose a range of challenges for governance. Using
opportunities afforded by globalization and the opening of civil
society, communal groups will be better positioned to mobilize
coreligionists or ethnic kin to assert their interests or defend
against perceived economic or political discrimination. Ethnic
diasporas and coreligionists abroad also will be more able and
willing to provide fraternal groups with political, financial,
and other support.

By 2015, Christianity and Islam, the two largest religious
groupings, will have grown significantly. Both are widely dispersed
in several continents, already use information technologies to
"spread the faith," and draw on adherents to fund numerous
nonprofit groups and political causes. Activist components of
these and other religious groupings will emerge to contest such
issues as genetic manipulation, women's rights, and the income
gap between rich and poor. A wider religious or spiritual movement
also may emerge, possibly linked to environmental values.

Estimates of the number of distinct ethnic-linguistic groups
at the beginning of the twenty-first century run from 2,000 to
5,000, ranging from small bands living in isolated areas to larger
groups living in ancestral homelands or in diasporas. Most of
the world's 191 states are ethnically heterogeneous, and many
contain ethnic populations with co-ethnics in neighboring states.
By 2015, ethnic heterogeneity will increase in almost all states,
as a result of international migration and divergent birthrates
of migrant and native populations.

Communal tensions, sometimes culminating in conflict, probably
will increase through 2015. In addition to some ongoing communal
frictions that will persist, triggers of new tensions will include:

Repression by the state. States with slow economic
growth, and/or where executive power is concentrated in an exclusionary
political elite and the rule of law and civil or minority rights
are weak, will be inclined to discriminate against communal minorities.
Such conditions will foment ethnic tensions in Sub-Saharan Africa,
Central and South Asia, and parts of the Middle East, often in
rapidly growing urban areas. Certain powerful statessuch
as Russia, China, Brazil, and Indiaalso are likely to repress
politicized communal minorities.

Religious, often fused with ethnic, grievances. Few
Muslim states will grant full political and cultural rights to
religious minorities. At the same time, they will not remain
indifferent to the treatment of Muslim minorities elsewhere:
in Russia, Indonesia, India/Kashmir, China, and the Balkans.
Other religious denominations also will support beleaguered coreligionists.

Resistance to migration. Some relatively homogenous
countries or sub-regions in Asia and Europe will resist ethnically
diverse migrants, creating tensions.

Indigenous protest movements. Such movements will
increase, facilitated by transnational networks of indigenous
rights activists and supported by well-funded international human
rights and environmental groups. Tensions will intensify in the
area from Mexico through the Amazon region; northeastern India;
and the Malaysian-Indonesian archipelago.

Overall Impact on States
The developed democracies will be best positioned for good governance
because they will tend to empower legitimate nonstate actors
in both the for-profit and nonprofit sectors; will favor institutions
and processes that accommodate divergent communal groups; will
press for transparency in government and the efficient delivery
of public services; and will maintain institutions to regulate
legitimate for-profit and nonprofit organizations and control
illegitimate criminal groups. Countries in Western Europe, Canada,
Australia, New Zealand, and Japan have the requisite agility
and institutions to meet the challenges. Countries in Eastern
Europe as well as Turkey, South Korea, India, Chile, and Brazil,
among other developing countries, are moving in these directions,
despite some continuing obstacles.

Some newly democratic states and modernizing authoritarian
states will have leaders amenable to technological change and
access to substantial human and financial resources. They will
encourage business firms, nonprofits, and communal groups supportive
of the government and discourage or suppress those that are independent-minded
or critical of government policies. They will have some success
in coping with the energy, ideas, and resources of nonstate actors.
Several Asian countries, such as Singapore, Taiwan, and perhaps
China, as well as some states in the Middle East and Latin America
are likely to take this approach.

Other states in varying degrees will lack the resources and
leadership to achieve effective governance. Most autocratic states
in the Middle East and Africa will not have the institutions
or cultural orientation to exploit the opportunities provided
by nonstate actorsapart from certain forms of humanitarian
assistance. In many of these countries, nonstate actors will
become more important than governments in providing services,
such as health clinics and schools. In the weakest of these countries,
communal, criminal, or terrorist groups will seek control of
government institutions and/or territory.

Overall, the number of stateswhich has more than tripled
since 1945 and has grown 20 percent since 1990is likely
to increase at a slower rate through 2015. This growth will result
from remaining cases of decolonization and to communal tensions
leading to state secession, most likely in Sub-Saharan Africa,
Central Asia, and Indonesia. In some cases, new states will inspire
other secessionist movements, destabilizing countries where minorities
were not initially seeking secession.

At the same time, the very concept of "belonging"
to a particular state probably will erode among a growing number
of people with continuing transnational ties to more than one
country through citizenship, residence or other associations.

International Cooperation
Globalization and technological change are raising widespread
expectations that increased international cooperation will help
manage many transnational problems that states can no longer
manage on their own. Efforts to realize such expectations will
increase, but concerns about national interests as well as the
costs and risks involved in some types of international activism
will limit success.

Mechanisms of international cooperationintended to facilitate
bargaining, elucidate common interests and resolve differences
among stateshave increased rapidly in recent decades.

International treaties registered with the United Nations
more than tripled between 1970 and 1997. In addition, there are
growing numbers of agreements on standards and practices initiated
by self-selected private networks.

The number of international institutions increased by two-thirds
from 1985 until 1999, while at the same time becoming more complex,
more interrelated with often overlapping areas of responsibility,
and more closely linked to transnational networks and private
groups.

International cooperation will continue to increase through
2015, particularly when large economic stakes have mobilized
the for-profit sector, and/or when there is intense interest
from nonprofit groups and networks.

Most high-income democratic states will participate in multiple
international institutions and seek cooperation on a wide range
of issues to protect their interests and to promote their influence.
Members of the European Union will tackle the most ambitious
agenda, including significant political and security cooperation.

Strongly nationalistic and/or autocratic states will play
selective roles in inter-governmental organizations: working
within them to protect and project their interests, while working
against initiatives that they view as threatening to their domestic
power structures and national sovereignty. They will also work
against those international institutions viewed as creatures
of the established great powers and thus rigged against themsuch
as the IMF and the WTOas well as those that cede a major
role to nonstate actors.

Low-income developing countries will participate actively
in international organizations and arrangements to assert their
sovereignty, garner resources for social and economic development,
and gain support for the incumbent government. The most unstable
of these states will participate in international organizations
and arrangements primarily to maintain international recognition
for the regime.

Agenda for International Cooperation

Cooperation is likely to be effective in such areas as:

Monitoring international financial flows and financial safehavens.

Law enforcement against corruption, and against trafficking
in narcotics and women and children.

Monitoring meteorological data and warning of extreme weather
events.

Selected environmental issues, such as reducing substances
that deplete the ozone layer or conserving high-seas fisheries.

Developing vaccines or medicines against major infectious
diseases, such as HIV/AIDS or malaria and surveillance of infectious
disease outbreaks.

Humanitarian assistance for refugees and for victims of famines,
natural disasters, and internal conflicts where relief organizations
can gain access.

Counterterrorism.

Efforts by international and regional organizations to resolve
some internal and interstate conflicts, particularly in Africa.

Cooperation is likely to be contentious and with mixed
results in such areas as:

Conditions under which Intellectual Property Rights are protected.

Reform and strengthening of international financial institutions,
particularly the Bretton Woods institutions.

Expansion of the UN Security Council.

Adherence by major states to an International Criminal Court
with universal, comprehensive jurisdiction.

Control of greenhouse gas emissions to reduce global warming,
carrying out the purposes of the 1997 Kyoto Protocol on Climate
Change.

Acceptance of genetically-modified organisms to improve nutrition
and health in poor regions.

Establishing peacekeeping forces and standby military forces
under the authority of the UN Security Council or most regional
organizations, with the possible exception of the EU.

Military action by forces authorized by the United Nations
to correct abuses of human rights within states, pursuant to
an asserted principle of humanitarian intervention or an expanded
right of secession. Although "coalitions of the willing"
will undertake such operations from time to time, a significant
number of states will continue to view such interventions as
illegitimate interference in the internal affairs of sovereign
states.

Proposed new rights to enjoy or appropriate elements of the
"global commons," such as a right to "open borders"
for people from lower-income countries.

Future Conflict

Through 2015, internal conflicts will pose the most frequent
threat to stability around the world. Interstate wars, though
less frequent, will grow in lethality due to the availability
of more destructive technologies. The international community
will have to deal with the military, political, and economic
dimensions of the rise of China and India and the continued decline
of Russia.

Internal Conflicts
Many internal conflicts, particularly those arising from communal
disputes, will continue to be vicious, long-lasting and difficult
to terminateleaving bitter legacies in their wake.

If left to fester, internal conflicts will trigger spillover
into inter-state conflicts as neighboring states move to exploit
opportunities for gain or to limit the possibilities of damage
to their national interests.

Weak states will spawn recurrent internal conflicts, threatening
the stability of a globalizing international system.

Internal conflicts stemming from state repression, religious
and ethnic grievances, increasing migration pressures, and/or
indigenous protest movements will occur most frequently in Sub-Saharan
Africa, the Caucasus and Central Asia, and parts of south and
southeast Asia, Central America and the Andean region.

The United Nations and several regional organizations will
continue to be called upon to manage some internal conflicts
because major statesstressed by domestic concerns, perceived
risk of failure, lack of political will, or tight resourceswill
wish to minimize their direct involvement. When, however, some
Western governments, international and regional organizations,
and civil-society groups press for outside military intervention
in certain internal conflicts, they will be opposed by such states
as China, India, Russia and many developing countries that will
tend to view interventions as dangerous precedents challenging
state sovereignty.

Transnational Terrorism
States with poor governance; ethnic, cultural, or religious tensions;
weak economies; and porous borders will be prime breeding grounds
for terrorism. In such states, domestic groups will challenge
the entrenched government, and transnational networks seeking
safehavens.

At the same time, the trend away from state-supported political
terrorism and toward more diverse, free-wheeling, transnational
networksenabled by information technologywill continue.
Some of the states that actively sponsor terrorism or terrorist
groups today may decrease or even cease their support by 2015
as a result of regime changes, rapprochement with neighbors,
or the conclusion that terrorism has become counterproductive.
But weak states also could drift toward cooperation with terrorists,
creating defacto new state supporters.

Between now and 2015 terrorist tactics will become increasingly
sophisticated and designed to achieve mass casualties. We expect
the trend toward greater lethality in terrorist attacks to continue.

Interstate Conflicts
Over the next 15 years, the international system will have to
adjust to changing power relationships in key regions:

China's potential. Estimates of China beyond five
years are fraught with unknowables. Some projections indicate
that Chinese power will rise because of the growth of its economic
and military capabilities. Other projections indicate that the
array of political, social, and economic pressures will increasingly
challenge the stability and legitimacy of the regime. Most assessments
today argue that China will seek to avoid conflict in the region
to promote stable economic growth and to ensure internal stability.
A strong China, others assert, would seek to adjust regional
power arrangements to its advantage, risking conflict with neighbors
and some powers external to the region. A weak China would increase
prospects for criminality, narcotics trafficking, illegal migration,
WMD proliferation, and widespread social instability.

Russia's decline. By 2015, Russia will be challenged
even more than today to adjust its expectations for world leadership
to the dramatically reduced resources it will have to play that
role. The quality of Russian governance is an open question as
is whether the country will be able to make the transition in
a manner that preserves rather than upsets regional stability.

Japan's uncertainty. In the view of many experts,
Japan will have difficulty maintaining its current position as
the world's third largest economy by 2015. Tokyo has so far not
shown a willingness to carry through the painful economic reforms
necessary to slow the erosion of its leadership role in Asia.
In the absence of an external shock, Japan is similarly unlikely
to accelerate changes in security policy.

India's prospects. India will strengthen its role
as a regional power, but many uncertainties about the effects
of global trends on its society cast doubt on how far India will
go. India faces growing extremes between wealth and poverty,
a mixed picture on natural resources, and problems with internal
governance.

The changing dynamics of state power will combine with other
factors to affect the risk of conflict in various regions. Changing
military capabilities will be prominent among the factors that
determine the risk of war. In South Asia, for example, that risk
will remain fairly high over the next 15 years. India and Pakistan
are both prone to miscalculation. Both will continue to build
up their nuclear and missile forces.

India most likely will expand the size of its nuclear-capable
force. Pakistan's nuclear and missile forces also will
continue to increase. Islamabad has publicly claimed that the
number of nuclear weapons and missiles it deploys will be based
on "minimum" deterrence and will be independent of
the size of India's arsenal. A noticeable increase in the size
of India's arsenal, however, would prompt Pakistan to further
increase the size of its own arsenal.

Russia will be unable to maintain conventional forces
that are both sizable and modern or to project significant military
power with conventional means. The Russian military will increasingly
rely on its shrinking strategic and theater nuclear arsenals
to deter or, if deterrence fails, to counter large-scale conventional
assaults on Russian territory.

Moscow will maintain as many strategic missiles and associated
nuclear warheads as it believes it can afford but well short
of START I or II limitations. The total Russian force by 2015,
including air launched cruise missiles, probably will be below
2,500 warheads.

As Russia struggles with the constraints on its ambitions,
it will invest scarce resources in selected and secretive military
technology programs, especially WMD, hoping to counter Western
conventional and strategic superiority in areas such as ballistic
missile defense.

China's People's Liberation Army (PLA) will remain
the world's largest military, but the majority of the force will
not be fully modernized by 2015. China could close the technological
gap with the West in one or more major weapons systems. China's
capability for regional military operations is likely to improve
significantly by 2015.

China will be exploiting advanced weapons and production
technologies acquired from abroadRussia, Israel, Europe,
Japan, and the United Statesthat will enable it to integrate
naval and air capabilities against Taiwan and potential adversaries
in the South China Sea.

In the event of a peaceful resolution of the Taiwan issue,
some of China's military objectivessuch as protecting the
sea lanes for Persian Gulf oilcould become more congruent
with those of the United States. Nevertheless, as an emerging
regional power, China would continue to expand its influence
without regard to US interests.

China by 2015 will have deployed tens to several tens of
missiles with nuclear warheads targeted against the United States,
mostly more survivable land- and sea-based mobile missiles. It
also will have hundreds of shorter-range ballistic and cruise
missiles for use in regional conflicts. Some of these shorter-range
missiles will have nuclear warheads; most will be armed with
conventional warheads.

China: How to Think About Its Growing Wealth and Power

China has been riding the crest of a significant wave of economic
growth for two decades. Many experts assess that China can maintain
a growth rate of 7 percent or more for many years. Such impressive
rates provide a foundation for military potential, and some predict
that China's rapid economic growth will lead to a significant
increase in military capabilities. But the degree to which an
even more powerful economy would translate into greater military
power is uncertain.

The relationship between economic growth and China's overall
power will derive from the priorities of leaders in Beijingprovided
the regime remains stable. China's leaders have assessed for
some years that comprehensive national power derives both from
economic strength and from the military and diplomatic resources
that a healthy, large economy makes possible. They apparently
agree that, for the foreseeable future, such priorities as agricultural
and national infrastructure modernization must take precedence
over military development. In the absence of a strong national
security challenge, this view is unlikely to change even as new
leaders emerge in Beijing. In a stable environment, two leadership
transitions will occur in China between now and 2015. The evidence
strongly suggests that the new leaders will be even more firmly
committed to developing the economy as the foundation of national
power and that resources for military capabilities will take
a secondary role. Existing priorities and projected defense allocations
could enable the PLA to emerge as the most powerful regional
military force.

A decision to alter priorities to emphasize military development
would require substantial change in the leadership. Internal
instability or a rise in nationalism could produce such change
but also probably would result in economic decline.

Japan has a small but modern military force, more able
than any other in Asia to integrate large quantities of new weaponry.
Japan's future military strength will reflect the state of its
economy and the health of its security relationship with the
United States. Tokyo will increasingly pursue greater autonomy
in security matters and develop security enhancements, such as
defense improvements and more active diplomacy, to supplement
the US alliance.

A unified Korea with a significant US military presence
may become a regional military power. For the next 10 to 15 years,
however, knowledgeable observers suggest that the process of
unification will consume South Korea'senergies and resources.

Absent unification, North Korea's WMD capabilities
will continue to cloud regional stability. P'yongyang probably
has one, possibly two, nuclear weapons. It has developed medium-range
missiles for years and has tested a three-stage space launch
vehicle.

P'yonyang may improve the accuracy, range, and payload capabilities
of its Taepo Dong-2 ICBM, deploy variants, or develop more capable
systems. North Korea could have a few to several Taepo Dong-2
type missiles deployed by 2005.

In the Middle East, the confluence of domestic economic
pressures and regional rivalries is likely to further the proliferation
of weapons of mass destruction and the means to deliver them.
By contrast, spending on conventional arms probably will remain
stable or decline in most countries. Some governments may maintain
large armed forces to absorb otherwise unemployable youths, but
such armies will be less well trained and equipped. Rather than
conventional war, the region is likely to experience more terrorism,
insurgencies, and humanitarian emergencies arising from internal
disparities or disputes over ethnic or religious identity.

Iran sees its short- and medium-range missiles as
deterrents, as force-multiplying weapons of war, primarily with
conventional warheads, and as options for delivering biological,
chemical, and eventually nuclear weapons. Iran could test an
IRBM or land-attack cruise missile by 2004 and perhaps even an
ICBM or space launch vehicle as early as 2001.

Iraq's ability to obtain WMD will be influenced, in
part, by the degree to which the UN Security Council can impede
development or procurement over the next 15 years. Under some
scenarios, Iraq could test an ICBM capable of delivering nuclear-sized
payloads to the United States before 2015; foreign assistance
would affect the capabilities of the missile and the time it
became available. Iraq could also develop a nuclear weapon during
this period.

Reacting to US Military Superiority
Experts agree that the United States, with its decisive edge
in both information and weapons technology, will remain the dominant
military power during the next 15 years. Further bolstering the
strong position of the United States are its unparalleled economic
power, its university system, and its investment in research
and developmenthalf of the total spent annually by the
advanced industrial world. Many potential adversaries, as reflected
in doctrinal writings and statements, see US military concepts,
together with technology, as giving the United States the ability
to expand its lead in conventional warfighting capabilities.

This perception among present and potential adversaries will
continue to generate the pursuit of asymmetric capabilities against
US forces and interests abroad as well as the territory of the
United States. US opponentsstate and such nonstate actors
as drug lords, terrorists, and foreign insurgentswill not
want to engage the US military on its terms. They will choose
instead political and military strategies designed to dissuade
the United States from using force, or, if the United States
does use force, to exhaust American will, circumvent or minimize
US strengths, and exploit perceived US weaknesses. Asymmetric
challenges can arise across the spectrum of conflict that will
confront US forces in a theater of operations or on US soil.

Central Asia: Regional Hot Spot?

The interests of Russia, China, and Indiaas well as
of Iran and Turkeywill intersect in Central Asia; the states
of that region will attempt to balance those powers as well as
keep the United States and the West engaged to prevent their
domination by an outside power. The greatest danger to the region,
however, will not be a conflict between states, which is unlikely,
but the corrosive impact of communal conflicts and politicial
insurgencies, possibly abetted by outside actors and financed
at least in part by narcotraffickers.

It is also generally recognized that the United States and
other developed countries will continue to possess the political,
economic, military, and technological advantagesincluding
through National Missile and Theater Missile Defense systemsto
reduce the gains of adversaries from lateral or "side-wise"
technological improvements to their capabilities.

Threats to Critical Infrastructure. Some potential
adversaries will seek ways to threaten the US homeland. The US
national infrastructurecommunications, transportation,
financial transactions, energy networksis vulnerable to
disruption by physical and electronic attack because of its interdependent
nature and by cyber attacks because of their dependence on computer
networks. Foreign governments and groups will seek to exploit
such vulnerabilities using conventional munitions, information
operations, and even WMD. Over time, such attacks increasingly
are likely to be delivered by computer networks rather than by
conventional munitions, as the affinity for cyber attacks and
the skill of US adversaries in employing them evolve. Cyber attacks
will provide both state and nonstate adversaries new options
for action against the United States beyond mere words but short
of physical attackstrategic options that include selection
of either nonlethal or lethal damage and the prospect of anonymity.

Information Operations. In addition to threatening
the US national infrastructure, adversaries will seek to attack
US military capabilities through electronic warfare, psychological
operations, denial and deception, and the use of new technologies
such as directed energy weapons or electromagnetic pulse weapons.
The primary purpose would be to deny US forces information superiority,
to prevent US weapons from working, and to undermine US domestic
support for US actions. Adversaries also are likely to use cyber
attacks to complicate US power projection in an era of decreasing
permanent US military presence abroad by seeking to disrupt military
networks during deployment operationswhen they are most
stressed. Many countries have programs to develop such technologies;
few have the foresight or capability to fully integrate these
various tools into a comprehensive attack. But they could develop
such capabilities over the next decade and beyond.

Terrorism. Much of the terrorism noted earlier will
be directed at the United States and its overseas interests.
Most anti-US terrorism will be based on perceived ethnic, religious
or cultural grievances. Terrorist groups will continue to find
ways to attack US military and diplomatic facilities abroad.
Such attacks are likely to expand increasingly to include US
companies and American citizens. Middle East and Southwest Asian-based
terrorists are the most likely to threaten the United States.

Weapons of Mass Destruction. WMD programs reflect the
motivations and intentions of the governments that produce them
and, therefore, can be altered by the change of a regime or by
a regime's change of view. Linear projections of WMD are intended
to assess what the picture will look like if changes in motivations
and intentions do not occur.

Short- and medium-range ballistic missiles, particularly if
armed with WMD, already pose a significant threat overseas to
US interests, military forces, and allies. By 2015, the United
States, barring major political changes in these countries, will
face ICBM threats from North Korea, probably from Iran, and possibly
from Iraq, in addition to long-standing threats from Russia and
China.

Weapons development programs, in many cases fueled by foreign
assistance, have led to new capabilitiesas illustrated
by Iran's Shahab-3 launches in 1998 and 2000 and North Korea's
Taepo Dong-1 space launch attempt in August 1998. In addition,
some countries that have been traditional recipients of missile
technologies have become exporters.

Sales of ICBMs or space launch vehicles, which have inherent
ICBM capabilities, could further increase the number of countries
that will be able to threaten the United States with a missile
strike.

The probability that a missile armed with WMD would
be used against US forces or interests is higher today than during
most of the Cold War and will continue to grow. The emerging
missile threats will be mounted by countries possessing considerably
fewer missiles with far less accuracy, yield, survivability,
reliability, and range-payload capability than the strategic
forces of the Soviet Union. North Korea's space launch attempt
in 1998 demonstrated that P'yongyang is seeking a long-range
missile capability that could be used against US forces and interests
abroad and against US territory itself. Moreover, many of the
countries developing longer-range missiles assess that the mere
threat of their use would complicate US crisis decisionmaking
and potentially would deter Washington from pursuing certain
objectives.

Other means to deliver WMD against the United States will
emerge, some cheaper and more reliable and accurate than early-generation
ICBMs. The likelihood of an attack by these means is greater
than that of a WMD attack with an ICBM. The goal of the adversary
would be to move the weapon within striking distance by using
short- and medium-range missiles deployed on surface ships or
covert missions using military special operations forces or state
intelligence services. Non-missile delivery means, however, do
not provide the same prestige, deterrence, and coercive diplomacy
associated with ICBMs.

WMD Proliferation and the Potential for Unconventional Warfare
and Escalation

The risks of escalation inherent in direct armed conflict
will be magnified by the availability of WMD; consequently, proliferation
will tend to spur a reversion to prolonged, lower-level conflict
by other means: intimidation, subversion, terrorism, proxies,
and guerrilla operations. This trend already is evident between
Israel and some of its neighbors and between India and Pakistan.
In the event of war, urban fighting will be typical and consequently,
civilian casualties will be high relative to those among combatants.
Technology will count for less, and large, youthful, and motivated
populations for more. Exploitation of communal divisions within
an adversary's civil populations will be seen as a key to winning
such conflictsincreasing their bitterness and thereby prolonging
them.

Chemical and biological threats to the United States will
become more widespread; such capabilities are easier to develop,
hide, and deploy than nuclear weapons. Some terrorists or insurgents
will attempt to use such weapons against US interestsagainst
the United States itself, its forces or facilities overseas,
or its allies. Moreover, the United States would be affected
by the use of such weapons anywhere in the world because Washington
would be called on to help contain the damage and to provide
scientific expertise and economic assistance to deal with the
effects. Such weapons could be delivered through a variety of
means, including missiles, unmanned aerial vehicles, or covertly
via land, air, and sea.

Trends in Global Defense Spending and Armaments

Defense-related technologies will advance rapidly over the
next 15 yearsparticularly precision weapons, information
systems and communications. The development and integrated application
of these technologies will occur mostly in the advanced countries,
particularly the United States. Given the high costs and complexity
of technical and operational integration, few nations will assign
high priority to the indigenous development of such military
technology.

Non-US global defense spending has dropped some 50 percent
since the late 1980s. "Military modernization accounts,"
particularly procurement, have been hit hard.

The global arms market has decreased by more than 50 percent
during the same period.

Indications are that global defense spending may be recovering
from mid-1990s lows; part of East Asia, for example, could experience
rises in defense spending over the next decade, but, overall,
long-term spending patterns are uncertain.

Over the past decade, a slow but persistent transformation
has occurred in the arms procurement strategies of states. Many
states are attempting to diversify sources of arms for reasons
that vary from fears of arms embargoes, to declining defense
budgets, or to a desire to acquire limited numbers of cutting-edge
technologies. Their efforts include developing a mix of indigenous
production; codeveloping, coproducing, or licensing production;
purchasing entire weapon systems; or leasing capabilities. At
the same time, many arms-producing states, confronted with declining
domestic arms needs but determined to maintain defense industries,
are commercializing defense production and aggressively expanding
arms exports.

Together, the above factors suggest:

Technology diffusion to those few states with a motivation
to arm and the economic resources to do so will accelerate
as weapons and militarily relevant technologies are moved rapidly
and routinely across national borders in response to increasingly
commercial rather than security calculations. For such militarily
related technologies as the Global Positioning System, satellite
imagery, and communications, technological superiority will
be difficult to maintain for very long. In an environment
of broad technological diffusion, nonmaterial elements of military
powerstrategy, doctrine, and trainingwill increase
in importance over the next 15 years in deciding combat outcomes.

Export regimes and sanctions will be difficult to manage
and less effective in controlling arms and weapons technology
transfers. The resultant proliferation of WMD and long-range
delivery systems would be destabilizing and increase the risk
of miscalculation and conflict that produces high casualties.

Advantages will go to states that have a strong commercial
technology sector and develop effective ways to link these capabilities
to their national defense industrial base. States able to
optimize private and public sector linkages could achieve significant
advancements in weapons systems.

The twin developments outlined aboveconstrained defense
spending worldwide combined with increasing military technological
potentialpreclude accurate forecasts of which technologies,
in what quantity and form, will be incorporated in the military
systems of future adversaries. In many cases, the question will
not be which technologies provide the greatest military potential
but which will receive the political backing and resources to
reach the procurement and fielding stage. Moreover, civilian
technology development already is driving military technology
development in many countries.

Theater-range ballistic and cruise missile proliferation will
continue. Most proliferation will involve systems a generation
or two behind state of the art, but they will be substantially
new capabilities for the states that acquire them. Such missiles
will be capable of delivering WMD or conventional payloads inter-regionally
against fixed targets. Major air and sea ports, logistics bases
and facilities, troop concentrations, and fixed communications
nodes increasingly will be at risk.

Land-attack cruise missiles probably will be more accurate
than ballistic missiles.

Access to Space. US competitors and adversaries realize
the degree to which access to space is critical to US
military power, and by 2015 they will have made strides in countering
US space dominance. International commercialization of space
will give states and nonstate adversaries access rivaling today's
major space powers in such areas as high-resolution reconnaissance
and weather prediction, global encrypted communications, and
precise navigation. When combined, such services will provide
adversaries who are aware of US and allied force deployments
the capability for precise targeting and global coordination
of operations. Moreover, many adversaries will have developed
capabilities to degrade US space assetsin particular, with
attacks against ground facilities, electronic warfare, and denial
and deception. By 2015, several countries will have such counterspace
technologies as improved space-object tracking, signal jamming,
and directed-energy weapons such as low-power lasers.

Arms Control: An Uncertain Agenda

The last three decades witnessed significant negotiations
between the United States and the Soviet Union (and Russia),
but the future probably will not replicate those efforts in form
or magnitude.

The INF, CFE, and START I treaties and, to a large extent,
the CWC were concluded in an effort to reduce tensions during
the Cold War. Verification and monitoring in each of these treaties
were viewed as essential to their implementation.

Prospects for bilateral arms control between the major powers
probably will be dim over the next 15 years; progress in multilateral
regimeswith less intrusive and lower-certainty monitoringprobably
will grow sporadically. Beyond this generalization:

Efforts will be incremental, focusing mainly on extensions,
modifications or adaptations of existing treaties, such as START
III between the United States and Russia or a protocol enhancing
verification of the Biological Weapons Convention.

Efforts will assume a more regional focus as countries of
concern continue developing their own WMD arsenals.

Safeguarding and controlling transfer of materials and technology
for nuclear weapons and missile delivery systems will take on
greater importance.

Agreements are more likely to be asymmetrical in terms of
the goals and outcomes. For example, a form of barter may become
the norm. Sides will negotiate dissimilar commitments in reaching
agreement. An example would be North Korea's willingness to give
up nuclear weapons and missiles in return for electric power
and space launch services.

Major Regions

The following snapshots of individual regions result from
our assessment of trends and from estimates by regional experts
as to where specific nations will be in 15 years. To make these
judgments, we have distilled the views expressed by many outside
experts in our conferences and workshops. The results are intended
to stimulate debate, not to endorse one view over another.

East and Southeast Asia
Regional Trends. East Asia over the next 15 years will be
characterized by uneven economic dynamismboth between and
within statespolitical and national assertiveness rather
than ideology, and potential for strategic tension if not outright
conflict.

The states of the region will be led by generally nationalistic
governments eschewing ideology and focusing on nation-building
and development. These states will broadly accommodate international
norms on the free flow of information to modernize their economies,
open markets, and fight international crime and disease. They
also will encounter pressure for greater political pluralism,
democracy, and respect for human rights. Failure to meet popular
expectations probably will result in leaders being voted out
of office in democratic states or in widespread demonstrations
and violence leading to regime collapse in authoritarian states.

Political and Security Trends. The major power realignments
and the more fluid post-Cold War security environment in the
region will raise serious questions about how regional leaders
will handle nascent great-power rivalries (the US-China, China-Japan,
China-India), related regional "hot spots" (Taiwan,
Korea, South China Sea), the future of challenged political regimes
(Indonesia, North Korea absent unification, China), and communal
tensions and minority issues (in China, Indonesia, the Philippines,
and Malaysia). On balance, the number and range of rivalries
and potential flashpoints suggest a better-than-even chance that
episodes of military confrontation and conflict will erupt over
the next 15 years.

The implications of the rise of China as an economic and increasingly
capable regional military powereven as the influence of
Communism and authoritarianism weakenspose the greatest
uncertainty in the area. Adding to uncertainty are the prospects
forand implications ofKorean unification over the
next 15 years, and the evolution of Japan's regional leadership
aspirations and capabilities.

Instability in Russia and Central Asia, and the nuclear standoff
between India and Pakistan will be peripheral but still important
in East Asian security calculations. The Middle East will become
increasingly important as a primary source of energy.

Economic Dynamism. While governments in the region
generally will accept the need to accommodate international norms
on ownership, markets, trade, and investment, they will seek
to block or slow the perceived adverse economic, political, and
social consequences of globalization.

The most likely economic outlook will be that rich societiesJapan,
Korea, Hong Kong, Taiwan, Singapore, and pockets in China and
elsewherewill get richer, with Japan likely to continue
to be a leader in S&T development and applications for commercial
use. In contrast, the poor societiesVietnam, Cambodia,
Laos, and rural areas in western China and elsewherewill
fall further behind. Greater economic links are likely to have
been forged between Taiwan, Hong Kong, and South China as a result
of the development of investment and infrastructure. China will
be increasingly integrated into the world economy through foreign
direct investiment, trade, and international capital markets.
Energy markets will have drawn the region more closely together
despite lingering issues of ownership of resources and territorial
disputes.

Key uncertainties will persist on economic performance and
political stability, including the rising costs of pensions and
services for Japan's aging population; the adequacy of energy
and water for China, political leadership in Indonesia and China,
and the impact of AIDS in Cambodia, Thailand, and Vietnam.

Regional Interaction. Given the weakness of regional
political-security arrangements, the US political, economic,
and security presence will remain pronounced. At the same time,
many countries in the region will remain uncertain about US objectives,
apprehensive of both US withdrawal and US unilateralism. Key
states, most significantly China and Japan, will continue "hedging,"
by using diplomacy, military preparations and other means to
ensure that their particular interests will be safeguarded, especially
in case the regional situation deteriorates.

Japan and others will seek to maintain a US presence, in part
to counter China's influence. Economic and other ties will bind
Japan and China, but historical, territorial, and strategic differences
will underline continuing wariness between the two. China will
want good economic ties to the United States but also will nurture
links to Russia and others to counter the possibility of US pressure
against it and to weaken US support for Taiwan and the US security
posture in East Asia. US-China confrontations over Taiwan or
over broader competing security interests are possible.

Although preserving the US alliance, Japanese leaders also
will be less certain they can rely on the United States to deal
with some security contingencies. More confident of their ability
to handle security issues independently, they will pursue initiatives
internally and overseas that are designed to safeguard Japanese
interests without direct reference to the US alliance.

South Asia
Regional Trends. The widening strategic and economic gaps
between the two principal powers, India and Pakistanand
the dynamic interplay between their mutual hostility and the
instability in Central Asiawill define the South Asia region
in 2015.

India will be the unrivaled regional power with a large militaryincluding
naval and nuclear capabilitiesand a dynamic and growing
economy. The widening India-Pakistan gapdestabilizing in
its own rightwill be accompanied by deep political, economic,
and social disparities within both states.

Pakistan will be more fractious, isolated, and dependent
on international financial assistance.

Other South Asian statesBangladesh, Sri Lanka, and
Nepalwill be drawn closer to and more dependent on India
and its economy. Afghanistan will likely remain weak and a destabilizing
force in the region and the world.

Wary of China, India will look increasingly to the West, but
its need for oil and desire to balance Arab ties to Pakistan
will lead to strengthened ties to Persian Gulf states as well.

Demographic Challenges. Although population growth
rates in South Asia will decline, population still will grow
by nearly 30 percent by 2015. India's population alone will grow
to more than 1.2 billion. Pakistan's projected growth from 140
million to about 195 million in 2015 will put a major strain
on an economy already unable to meet the basic needs of the current
population. The percentage of urban dwellers will climb steadily
from the current 25-30 percent of the population to between 40-50
percent, leading to continued deterioration in the overall quality
of urban life. Differential population growth patterns will exacerbate
inequalities in wealth. Ties between provincial and central governments
throughout the region will be strained.

Resource and Environmental Challenges. Water will remain
South Asia's most vital and most contested natural resource.
Continued population and economic growth and expansion of irrigated
agriculture over the next 15 years will increasingly stress water
resources, and pollution of surface and groundwater will be a
serious challenge. In India, per capita water availability is
likely to drop by 50-75 percent. Because many of the region's
waterways are interstate, water could become a source of renewed
friction. Deforestation in India and Nepal will exacerbate pollution,
flooding, and land degradation in Bangladesh.

India in 2015. Indian democracy will remain strong,
albeit more factionalized by the secular-Hindu nationalist debate,
growing differentials among regions and the increase in competitive
party politics. India's economy, long repressed by the heavy
hand of regulation, is likely to achieve sustained growth to
the degree reforms are implemented. High-technology companies
will be the most dynamic agents and will lead the thriving service
sector in four key urban centersMumbai, New Delhi, Bangalore,
and Chennai. Computer software services and customized applications
will continue to expand as India strengthens economic ties to
key international markets. Industries such as pharmaceuticals
and agro-processing also will compete globally. Numerous factors
provide India a competitive advantage in the global economy.
It has the largest English-speaking population in the developing
world; its education system produces millions of scientific and
technical personnel. India has a growing business-minded middle
class eager to strengthen ties to the outside world, and the
large Indian expatriate population provides strong links to key
markets around the world.

Despite rapid economic growth, more than half a billion Indians
will remain in dire poverty. Harnessing technology to improve
agriculture will be India's main challenge in alleviating poverty
in 2015. The widening gulf between "have" and "have-not"
regions and disagreements over the pace and nature of reforms
will be a source of domestic strife. Rapidly growing, poorer
northern states will continue to drain resources in subsidies
and social welfare benefits.

Pakistan in 2015. Pakistan, our conferees concluded,
will not recover easily from decades of political and economic
mismanagement, divisive politics, lawlessness, corruption and
ethnic friction. Nascent democratic reforms will produce little
change in the face of opposition from an entrenched political
elite and radical Islamic parties. Further domestic decline would
benefit Islamic political activists, who may significantly increase
their role in national politics and alter the makeup and cohesion
of the militaryonce Pakistan's most capable institution.
In a climate of continuing domestic turmoil, the central government's
control probably will be reduced to the Punjabi heartland and
the economic hub of Karachi.

Other Regional States. Prospects for Afghanistan, Bangladesh,
and Sri Lanka in 2015 appear bleak. Decades of foreign domination
and civil war have devastated Afghanistan's society and economy,
and the country is likely to remain internationally isolated,
a major narcotics exporter, and a haven for Islamic radicals
and terrorist groups. Bangladesh will not abandon democracy but
will be characterized by coalitions or weak one-party governments,
fragile institutions of governance, deep-seated leadership squabbles,
and no notion of a loyal opposition.

Security and Political Concerns Predominate. The threat
of major conflict between India and Pakistan will overshadow
all other regional issues during the next 15 years. Continued
turmoil in Afghanistan and Pakistan will spill over into Kashmir
and other areas of the subcontinent, prompting Indian leaders
to take more aggressive preemptive and retaliatory actions. India's
conventional military advantage over Pakistan will widen as a
result of New Delhi's superior economic position. India will
also continue to build up its ocean-going navy to dominate the
Indian Ocean transit routes used for delivery of Persian Gulf
oil to Asia. The decisive shift in conventional military power
in India's favor over the coming years potentially will make
the region more volatile and unstable. Both India and Pakistan
will see weapons of mass destruction as a strategic imperative
and will continue to amass nuclear warheads and build a variety
of missile delivery systems.

Russia and Eurasia
Regional Trends. Uncertainties abound about the future internal
configuration, geopolitical dynamics, and degree of turbulence
within and among former Soviet states. Russia and the other states
of Eurasia are likely to fall short in resolving critical impediments
to economic and political reform in their struggle to manage
the negative legacies of the Soviet period. Changing demographics,
chronic economic difficulties, and continued questions about
governance will constrain Russia's ability to project its power
beyond the former Soviet republics to the south, complicate Ukraine's
efforts to draw closer to the West, and retard the development
of stable, open political structures throughout the Caucasus
and Central Asia. Those states that could make progress on the
basis of potential energy revenues are likely to fail because
of corruption and the absence of structural economic reform.
The rapid pace of scientific and technological innovation, as
well as globalization, will leave these states further behind
the West as well as behind the major emerging markets.

The economic challenges to these countries will remain daunting:
insufficient structural reform, poor productivity in agriculture
as compared with Western standards, decaying infrastructure and
environmental degradation. Corruption and organized crime, sustained
by drug trafficking, money laundering, and other illegal enterprises
and, in several instances, protected by corrupt political allies,
will persist.

Demographic pressures also will affect the economic performance
and political cohesiveness of these states. Because of low birthrates
and falling life expectancy among males, the populations of the
Slavic core and much of the Caucasus will continue to decline;
Russian experts predict that the country's population could fall
from 146 million at present to 130-135 million by 2015. At the
other end of the spectrum, the Central Asian countries will face
a growing youth cohort that will peak around 2010 before resuming
a more gradual pattern of population growth.

The centrality of Russia will continue to diminish, and by
2015 "Eurasia" will be a geographic term lacking a
unifying political, economic, and cultural reality. Russia and
the western Eurasian States will continue to orient themselves
toward Europe but will remain essentially outside of it. Because
of geographic proximity and cultural affinities, the Caucasus
will be closer politically to their neighbors to the south and
west, with Central Asia drawing closer to South Asia and China.
Nonetheless, important interdependencies will remain, primarily
in the energy sphere.

Russia will remain the most important actor in the
former Soviet Union. Its power relative to others in the region
and neighboring areas will have declined, however, and it will
continue to lack the resources to impose its will.

The Soviet economic inheritance will continue to plague Russia.
Besides a crumbling physical infrastructure, years of environmental
neglect are taking a toll on the population, a toll made worse
by such societal costs of transition as alcoholism, cardiac diseases,
drugs, and a worsening health delivery system. Russia's population
is not only getting smaller, but it is becoming less and less
healthy and thus less able to serve as an engine of economic
recovery. In macro economic terms Russia's GDP probably has bottomed
out. Russia, nevertheless, is still likely to fall short in its
efforts to become fully integrated into the global financial
and trading system by 2015. Even under a best case scenario of
five percent annual economic growth, Russia would attain an economy
less than one-fifth the size of that of the United States.

Many Russian futures are possible, ranging from political
resurgence to dissolution. The general drift, however, is toward
authoritarianism, although not to the extreme extent of the Soviet
period. The factors favoring this course are President Putin's
own bent toward hierarchical rule from Moscow; the population's
general support of this course as an antidote to the messiness
and societal disruption of the post-Soviet transition; the ability
of the ruling elite to hold on to power because of the lack of
effective national opposition, thus making that elite accountable
only to itself; and the ongoing shift of tax resources from the
regions to the center. This centralizing tendency will contribute
to dysfunctional governance. Effective governance is nearly impossible
under such centralization for a country as large and diverse
as Russia and lacking well-ordered, disciplined national bureaucracies.
Recentralization, however, will be constrained by the interconnectedness
brought about by the global information revolution, and by the
gradual, although uneven, growth of civil society.

Russia will focus its foreign policy goals on reestablishing
lost influence in the former Soviet republics to the south, fostering
ties to Europe and Asia, and presenting itself as a significant
player vis-a-vis the United States. Its energy resources will
be an important lever for these endeavors. However, its domestic
ills will frustrate its efforts to reclaim its great power status.
Russia will maintain the second largest nuclear arsenal in the
world as the last vestige of its old status. The net outcome
of these trends will be a Russia that remains internally weak
and institutionally linked to the international system primarily
through its permanent seat on the UN Security Council.

Ukraine's path to the West will be constrained by widespread
corruption, the power of criminal organizations, and lingering
questions over its commitment to the rule of law. Kiev will remain
vulnerable to Russian pressures, primarily because of its continued
energy dependence, but Ukrainians of all political stripes and
likely to opt for independence rather than reintegration into
Russia's sphere of influence.

In 2015, the South Caucasus will remain in flux because
of unresolved local conflicts, weak economic fundamentals, and
continued Russian meddling. Georgia probably will have
achieved a measure of political and economic stability, fueled
in part by energy transit revenues, but it will remain the focus
of Russian attention in the region. Armenia will remain
largely isolated and is likely to remain a Russianor possibly
Iranianclient and, therefore, a regional wild card. Azerbaijan's
success in developing its energy sector is unlikely to bring
widespread prosperity: Baku will be a one-sector economy with
pervasive corruption at all levels of society.

In Central Asia, social, environmental, religious,
and possibly ethnic strains will grow. Wasteful water-intensive
practices and pollution of ground water and arable land will
lead to continued shortages for agricultural and energy generation.
The high birthrates of the 1980s and early 1990s will lead to
strains on education, healthcare, and social services. The region
also is likely to be the scene of increased competition among
surrounding powersRussia, China, India, Iran, and possibly
Turkeyfor control, influence, and access to energy resources.
Developments in Afghanistan and Pakistan will threaten regional
stability.

The Middle East and North Africa
Regimes in the regionfrom Morocco to Iranwill have
to cope with demographic, economic and societal pressures from
within and globalization from without. No single ideology or
philosophy will unite any one state or group of states in response
to these challenges, although popular resentment of globalization
as a Western intrusion will be widespread. Political Islam in
various forms will be an attractive alternative for millions
of Muslims throughout the region, and some radical variants will
continue to be divisive social and political forces.

By 2015, Israel will have attained a cold peace with its neighbors,
with only limited social, economic, and cultural ties. There
will be a Palestinian state, but Israeli-Palestinian tensions
will persist and occasionally erupt into crises. Old rivalries
among core statesEgypt, Syria, Iraq, and Iranwill
reemerge. International attention will shift anew to the Persian
Gulf, an increasingly important source of energy resources to
fuel the global economy, and oil revenues anticipated for Iraq,
Iran, and Saudi Arabia in particular will provide strategicand
potentially destabilizingoptions for those states. New
relationships between geographic regions could emerge between
North Africa and Europe (on trade); India, China and the Persian
Gulf (on energy); and Israel, Turkey, and India (on economic,
technical, and in the case of Turkey, security considerations).

A key driver for the Middle East over the next 15 years will
be demographic pressures, specifically how to provide jobs, housing,
public services, and subsidies for rapidly growing and increasingly
urban populations. By 2015, in much of the Middle East populations
will be significantly larger, poorer, more urban, and more disillusioned.
In nearly all Middle Eastern countries, more than half the population
is now under 20 years of age. These populations will continue
to have very large youth cohorts through 2015, with the labor
force growing at an average rate of 3.1 percent per year. The
problem of job placement is compounded by weak educational systems
producing a generation lacking the technical and problem-solving
skills required for economic growth.

Globalization. With the exception of Israel, Middle
Eastern states will view globalization more as a challenge than
an opportunity. Although the Internet will remain confined to
a small elite due to relatively high cost, undeveloped infrastructures,
and cultural obstacles, the information revolution and other
technological advances probably will have a net destabilizing
effect on the Middle East by raising expectations, increasing
income disparities, and eroding the power of regimes to control
information or mold popular opinion. Attracting foreign direct
investment will also be difficult: except for the energy sector,
investors will tend to shy away from these countries, discouraged
by overbearing state sectors; heavy, opaque, and arbitrary government
regulation; underdeveloped financial sectors; inadequate physical
infrastructure; and the threat of political instability.

Political Change. Most Middle Eastern governments recognize
the need for economic restructuring and even a modicum of greater
political participation, but they will proceed cautiously, fearful
of undermining their rule. As some governments or sectors embrace
the new economy and civil society while others cling to more
traditional paradigms, inequities between and within states will
grow. Islamists could come to power in states that are beginning
to become pluralist and in which entrenched secular elites have
lost their appeal.

Sub-Saharan Africa
Regional Trends. The interplay of demographics and diseaseas
well as poor governancewill be the major determinants of
Africa's increasing international marginalization in 2015. Most
African states will miss out on the economic growth engendered
elsewhere by globalization and by scientific and technological
advances. Only a few countries will do better, while a handful
of states will have hardly any relevance to the lives of their
citizens. As Sub-Saharan Africa's multiple and interconnected
problems are compounded, ethnic and communal tensions will intensify,
periodically escalating into open conflict, often spreading across
borders and sometimes spawning secessionist states.

In the absence of a major medical breakthrough, the relentless
progression of AIDS and other diseases will decimate the economically
productive adult population, sharply accentuate the continent's
youth bulge, and generate a huge cohort of orphaned children.
This condition will strain the ability of the extended family
system to cope and will contribute to higher levels of dissatisfaction,
crime, and political volatility.

Poverty and poor governance will further deplete natural resources
and drive rapid urbanization. As impoverished people flee unproductive
rural areas, many cities will double in population by 2015, but
resources will be inadequate to provide the needed expansion
of water systems, sewers, and health facilities. Cities will
be sources of crime and instability as ethnic and religious differences
exacerbate the competition for ever scarcer jobs and resources.
The number of malnourished people will increase by more than
20 percent and the potential for famine will persist where the
combination of internal conflict and recurring natural disasters
prevents or limits relief efforts.

Economic Prospects. Conditions for economic development
in Sub-Saharan Africa are limited by the persistence of conflicts,
poor political leadership and endemic corruption, and uncertain
weather conditions. Africa's most talented individuals will shun
the public sector or be lured abroad by greater income and security.
Effective and conscientious leaders are unlikely to emerge from
undemocratic and corrupt societies.

Most technological advances in the next 15 yearswith
the possible exception of genetically modified cropswill
not have substantial positive impact on the African economies.

Although West Africa will play an increasing role in global
energy markets, providing 25 percent of North American oil imports
in 2015, the pattern of oil wealth fostering corruption rather
than economic development will continue.

There will be exceptions to this bleak overall outlook. The
quality of governance, rather than resource endowments, will
be the key determinant of development and differentiation among
African states.

South Africa and Nigeria, the continent's largest economies,
will remain the dominant powers in the region through 2015. But
their ability to function as economic locomotives and stabilizers
in their regions will be constrained by large unmet domestic
demands for resources to stimulate employment, growth, and social
services, including dealing with AIDS. Even a robust South Africa
will not exert a strong pull on its partners in the Southern
African Development Community (SADC). The success of the South
African economy will be more closely tied to its relationship
with the larger global economy than with Sub-Saharan Africa.

Role of Nonstate Actors. The atrophy of special relationships
between European powers and their former colonies in Africa will
be virtually complete by 2015. Filling the void will be international
organizations and nonstate actors of all types: transnational
religious institutions; international nonprofit organizations,
international crime syndicates and drug traffickers; foreign
mercenaries; and international terrorists seeking safehavens.

Internal conflicts will attractand leaders will in
some cases welcome foreign criminal organizations or mercenaries
to assist in the plundering of national assets, while faltering
regimes will willingly trade their sovereignty for cash.

International organizations will be heavily engaged in Sub-Saharan
Africa over the next 15 years, given its growing needs and slow
growth relative to other regions. Africa will continue to receive
more development assistance per capita than other regions of
the world.

The international financial institutions will be a continuing
presence in Africa, as many donor countries funnel development
assistance through them.

The perpetuation of poor governance and communal conflicts
in a region awash with guns will generate frequent natural and
man-made humanitarian crises, precipitating international humanitarian
relief efforts.

The Economic Community of West African States (ECOWAS) and
the SADC will be the primary economic and political instruments
through which the continental powers, Nigeria and South Africa,
exert their leadership.

Europe
Regional Trends. Most of Europe in 2015 will be relatively
peaceful and wealthy. Its residents will do extensive business
with the rest of the world but politically will be more inward-looking
than the citizens of Europe in 2000. Looking out to 2015, Europe's
agenda will be to put in place the final components of EU integration;
to take advantage of globalization; to sustain a strong IT and
S&T base to tackle changing demographics; and to wean the
Balkans away from virulent nationalism.

EU enlargement, institutional reform, and a common foreign,
security and defense policy will play out over the next 15 years,
so that by 2015 the final contours of the "European project"
are likely to be firmly set. Having absorbed at least 10 new
members, the European Union will have achieved its geographic
and institutional limits.

As a consequence of long delays in gaining EU entry (and
the after-effects of actual membership), leaders in some Central/Eastern
Europe countries will be susceptible to pressures from authoritarian,
nationalist forces on both the left and right. These forces will
capitalize on public resentment about the effects of EU policy
and globalization, including unemployment, foreign ownership,
and cultural penetration.

The EU will not include Russia. The Europeans, nevertheless,
will seek to engage Moscowencouraging stability and maintaining
dialogue. Although Russia will continue to recede in importance
to the European governments, they will use US handling of Russia
as a barometer of how well or poorly Washington is exerting leadership
and defending European interests.

Economic Reform & Globalization. EU governments
will continue to seek a "third way" between state control
and unbridled capitalism: piecemeal and often unavowed economic
reform driven in part by an ever denser network of overseas business
relationships and changes in corporate governance. Lingering
labor market rigidity and state regulation will hamper restructuring,
retooling, and reinvestment strategies. Europe will trail the
United States in entrepreneurship and innovation as governments
seek ways to balance encouragement of these factors against social
effects. Thus, Europe will not achieve fully the dreams of parity
with the United States as a shaper of the global economic system.

In Prague, Vienna, and other European capitals, protestors
have questioned the merits of globalization. By 2015, Europe
will have globalized more extensively than some of its political
rhetoric will suggest. It also will have less difficulty than
other regions coping with rapid change because of high education
and technological levels. States will continue to push private
sector competitiveness in the international market. Three of
the top five information technology centers in the world will
be in Europe: London, Munich, and Paris.

Many Europeans will see the role of foreign policy as protecting
their social and cultural identities from the "excesses"
of globalizationand from its "superpatron," the
United States. One of the ways in which leaders will respond
will be to clamor for greater political control over international
financial and trade institutions.

The aging of the population and low birthrates will be major
challenges to European prosperity and cohesion. Greater percentages
of state budgets will have to be allocated to the aging, while,
at the same time, there will be significant, chronic shortages
both of highly skilled workers in IT and other professions and
unskilled workers in basic services. Legal and illegal immigration
will mitigate labor shortages to a limited extent but at a cost
in terms of social friction and crime. As EU governments grapple
with immigration policy and European and national identity, anti-immigrant
sentiment will figure more prominently in the political arena
throughout Western Europe.

Turkey. The future direction of Turkey, both internally
and geopolitically, will have a major impact on the region, and
on US and Western interests. Shifting political dynamics; debates
over identity, ethnicity and the role of religion in the state;
and the further development of civil society will figure prominently
in Turkey's domestic agenda. The road to Turkish membership in
the EU will be long and difficult, and EU member states will
evaluate Turkey's candidacy not only on the basis of economic
performance, but on how well it tackles this comprehensive agenda.
Part of Turkey's success will hinge on the effectiveness of a
growing private sector in advancing Turkey's reform efforts and
its goal of full integration in the West. NATO's involvement
in the Ballkans and expected enlargement in southern Europe will
increase ties between Turkey and the West.

By dint of its history, location, and interests, Turkey will
continue to pay attention to its neighbors to the northin
the Caucasus and Central Asiaand to the south and eastSyria,
Iraq and Iran. With few exceptions, these states will continue
to struggle with questions of governance. As Turkey crafts policies
toward the countries in these regions, no single issue will dominate
its national security agenda. Rather, Ankara will find itself
having to cope with regional rivalriesincluding what policies
to adopt toward internal and interstate conflictsproliferation
of weapons of mass destruction, the politics and economics of
energy transport, and water rights.

Europe and the World. Europe's agenda will require
it to demonstrate influence in world affairs commensurate with
its size in population and economic strength. The EU's global
reach will be based primarily on economics: robust trade and
investment links to the United States and growing ties to East
and Southeast Asia and Latin America.

In dealing with matters outside the region, European leaders
will construe their global responsibilities as building legal
mechanisms, encouraging diplomatic contact, andto a lesser
extentproviding nonmilitary aid. They will respond sporadically
to foreign criseseither through the UN or in ad hoc "coalitions
of the willing" with Washington or othersbut they
will not make strong and consistent overseas commitments, particularly
in regard to sending troops.

Transatlantic Links. Economic issues will have overtaken
security issues in importance by 2015, and the United States
will see its relations with Europe defined increasingly through
the EU, not only on the basis of trade but in the context of
using economic toolssuch as aid and preferential trading
regimesto underwrite peace initiatives.

By 2015, NATO will have accepted many, but not all, Central/Eastern
European countries. European Security and Defense Policy will
be set in terms of partnership with, rather than replacement
of, NATO.

Canada
Trends. Canada will be a full participant in the globalization
process in 2015 and a leading player in the Americas after the
United States, along with Mexico and Brazil. Ottawa will still
be grappling with the political, demographic, and cultural impact
of heavy Asian immigration in the West as well as residual nationalist
sentiment in French-speaking Quebec. The vast and diverse country,
however, will remain stable amidst constant, dynamic change.

Ottawa will continue to emphasize the importance of education,
and especially science and technology, for the new economy. Canada
also will promote policies designed to stem the flow of skilled
workers south and will seek to attract skilled immigrantsespecially
professionals from East and South Asiato ensure that Canada
will be able to take full advantage of global opportunities.
The question of Quebec's place in the country will continue to
stir national debate.

Canada's status as the pre-eminent US economic partner will
be even more pronounced in 2015. National sensitivity to encroaching
US culture will remain, even as the two economies become more
integrated. Ottawa will retain its interests in the stability
and prosperity of East Asia because of growing Canadian economic,
cultural, and demographic links to the Pacific region. As additional
trade links with Latin America are developed through the North
American Free Trade Agreement and a likely Free Trade Area of
the Americas, Canada increasingly will take advantage of developments
in the Western hemisphere. Although Canadians will focus more
on Latin America and less on Europe, they will still look to
NATO as the cornerstone of Western security. Like Europeans,
Canadians will judge US global leadership in terms of the relationship
with Russia, especially regarding strategic arms and National
Missile Defense (NMD).

Despite the relatively small size of Canada's armed forces,
Ottawa still will seek to participate in global and regional
discussions on the future of international peacekeeping. Canada
will continue to build on its traditional support for international
organizations by working to ensure a more effective UN and greater
respect for international treaties, norms, and regimes. Canadians
will be sympathetic to calls for greater political "management"
of globalization to help mitigate adverse impacts on the environment
and ensure that globalization's benefits reach less advantaged
regions and states.

Latin America
Regional Trends. By 2015, many Latin American countries will
enjoy greater prosperity as a result of expanding hemispheric
and global economic links, the information revolution, and lowered
birthrates. Progress in building democratic institutions will
reinforce reform and promote prosperity by enhancing investor
confidence. Brazil and Mexico will be increasingly confident
and capable actors that will seek a greater voice in hemispheric
affairs. But the region will remain vulnerable to financial crises
because of its dependence on external finance and the continuing
role of single commodities in most economies. The weakest countries
in the region, especially in the Andean region, will fall further
behind. Reversals of democracy in some countries will be spurred
by a failure to deal effectively with popular demands, crime,
corruption, drug trafficking, and insurgencies.

Latin Americaespecially Venezuela, Mexico, and Brazilwill
become an increasingly important oil producer by 2015 and an
important component of the emerging Atlantic Basin energy system.
Its proven oil reserves are second only to those located in the
Middle East.

Globalization Gains and Limits. Continued trade and
investment liberalization and the expansion of free trade agreements
within and outside of Latin America will be a significant catalyst
of growth. Regional trade integration through organizations such
as MERCOSUR and the likely conclusion of a Free Trade Area of
the Americas will both boost employment and provide the political
context for governments to sustain economic reforms even against
opposing entrenched interest groups.

Latin America's Internet market is poised to grow exponentially,
stimulating commerce, foreign investment, new jobs, and corporate
efficiency. Although Internet business opportunities will promote
the growth of firms throughout the region, Brazil, Argentina,
and Mexico are likely to be the biggest beneficiaries.

Shifting Demographics. Latin America's demographics
will shift markedlyto the distinct advantage of some countrieshelping
to ease social strains and underpin higher economic growth. During
the next 15 years, most countries will experience a substantial
slowdown in the number of new jobseekers, which will help reduce
unemployment and boost wages. But not all countries will enjoy
these shifts; Bolivia, Ecuador, Guatemala, Honduras, Nicaragua,
and Paraguay will still face rapidly increasing populations in
need of work.

Democratization Progress and Setbacks. By 2015, key
countries will have made some headway in building sturdier and
more capable democratic institutions. Democratic institutions
in Mexico, Argentina, Chile, and Brazil appear poised for continued
incremental consolidation. In other countries, crime, public
corruption, the spread of poverty, and the failure of governments
to redress worsening income inequality will provide fertile ground
for populist and authoritarian politicians. Soaring crime rates
will contribute to vigilantism and extrajudicial killings by
the police. Burgeoning criminal activityincluding money
laundering, alien smuggling, and narcotraffickingcould
overwhelm some Caribbean countries. Democratization in Cuba will
depend upon how and when Fidel Castro passes from the scene.

Growing Regional Gaps. By 2015, the gap between the
more prosperous and democratic states of Latin America and the
others will widen. Countries that are unable or unwilling to
undertake reforms will experience slow growth at best. Several
will struggle intermittently with serious domestic political
and economic problems such as crime, corruption, and dependence
on single commodities such as oil. Countries with high crime
and widespread corruption will lack the political consensus to
advance economic reforms and will face lower growth prospects.
Although poverty and inequality will remain endemic throughout
the region, high-fertility countries will face higher rates of
poverty and unemployment.

The Andean countriesColombia, Venezuela, Ecuador, and
Peruare headed for greater challenges of differing nature
and origin. Competition for scarce resources, demographic pressures,
and a lack of employment opportunities probably will cause workers'
anger to mount and fuel more aggressive tactics in the future.
Fatigue with economic hardship and deep popular cynicism about
political institutions, particularly traditional parties, could
lead to instability in Venezuela, Peru and Ecuador. Resolution
of the long-running guerrilla war is key to Colombia's future
prospects. The Cuban economy under a Castro Government will fall
further behind most of the Latin American countries that embrace
globalization and adopt free market practices.

Rising Migration. Pressures for legal and illegal migration
to the United States and regionally will rise during the next
15 years. Demographic factors, political instability, personal
insecurity, poverty, wage differentials, the growth of alien-smuggling
networks, and wider family ties will propel more Latin American
workers to enter the United States. El Salvador, Guatemala, Honduras,
and Nicaragua will become even greater sources of illegal migrants.
In Mexico, declining population growth and strong economic prospects
will gradually diminish pressures to seek work in the United
States, but disparities in living standards, US demand for labor,
and family ties will remain strong pull factors. Significant
political instability during a transition process in Cuba could
lead to mass migration.

The growth of Central American and Mexican alien-smuggling
networks will exacerbate problems along the US border.

Illegal migration within the region will become a more contentious
issue between Latin American governments. Argentina and Venezuela
already have millions of undocumented workers from neighboring
countries, and resentment of illegal workers could increase.
Although most Haitian migrants will head for the United States,
Haiti's Caribbean neighbors will also experience further strains.

Significant Discontinuities

The trends outlined in this study are based on the combinations
of drivers that are most likely over the next 15 years. Nevertheless,
the drivers could produce trends quite different from the ones
described. Below are possibilities different from those presented
in the body of the study:

Serious deterioration of living standards for the bulk of
the population in several major Middle Eastern countries and
the failure of Israel and the Palestinians to conclude even a
"cold peace," lead to serious, violent political upheavals
in Egypt, Jordan, and Saudi Arabia.

The trend toward more diverse, free-wheeling transnational
terrorist networks leads to the formation of an international
terrorist coalition with diverse anti-Western objectives and
access to WMD.

Another global epidemic on the scale of HIV/AIDS, or rapidly
changing weather patterns attributable to global warming, with
grave damage and enormous costs for several developed countriessparking
an enduring global consensus on the need for concerted action
on health issues and the environment.

A state of major concern to US strategic interestssuch
as Iran, Nigeria, Israel, or Saudi Arabiafails to manage
serious internal religious or ethnic divisions and crisis ensues.

A growing antiglobalization movement becomes a powerful sustainable
global political and cultural forcethreatening Western
governmental and corporate interests.

China, India, and Russia form a defacto geo-strategic alliance
in an attempt to counterbalance US and Western influence.

The US-European alliance collapses, owing in part to intensifying
trade disputes and competition for leadership in handling security
questions.

Major Asian countries establish an Asian Monetary Fund or
less likely an Asian Trade Organization, undermining the IMF
and WTO and the ability of the US to exercise global economic
leadership.

Appendix

Four Alternative Global Futures

In September-October 1999, the NIC initiated work on Global
Trends 2015 by cosponsoring with Department of State/INR
and CIA's Global Futures Project two unclassified workshops on
Alternative Global Futures: 2000-2015. The workshops brought
together several dozen government and nongovernment specialists
in a wide range of fields.

The first workshop identified major factors and events that
would drive global change through 2015. It focused on demography,
natural resources, science and technology, the global economy,
governance, social/cultural identities, and conflict and identified
main trends and regional variations. These analyses became the
basis for subsequent elaboration in Global Trends 2015.

The second workshop developed four alternative global futures
in which these drivers would interact in different ways through
2015. Each scenario was intended to construct a plausible, policy-relevant
story of how this future might evolve: highlighting key uncertainties,
discontinuities, and unlikely or "wild card" events,
and identifying important policy and intelligence challenges.

Scenario One: Inclusive Globalization:
A virtuous circle develops among technology, economic growth,
demographic factors, and effective governance, which enables
a majority of the world's people to benefit from globalization.
Technological development and diffusionin some cases
triggered by severe environmental or health crisesare utilized
to grapple effectively with some problems of the developing world.
Robust global economic growthspurred by a strong
policy consensus on economic liberalizationdiffuses wealth
widely and mitigates many demographic and resource problems.
Governance is effective at both the national and international
levels. In many countries, the state's role shrinks, as its functions
are privatized or performed by public-private partnerships, while
global cooperation intensifies on many issues through a variety
of international arrangements. Conflict is minimal within
and among states benefiting from globalization. A minority of
the world's peoplein Sub-Saharan Africa, the Middle East,
Central and South Asia, and the Andean regiondo not benefit
from these positive changes, and internal conflicts persist in
and around those countries left behind.

Scenario Two: Pernicious Globalization
Global elites thrive, but the majority of the world's population
fails to benefit from globalization. Population growth and
resource scarcities place heavy burdens on many developing
countries, and migration becomes a major source of interstate
tension. Technologies not only fail to address the problems
of developing countries but also are exploited by negative and
illicit networks and incorporated into destabilizing weapons.
The global economy splits into three: growth continues
in developed countries; many developing countries experience
low or negative per capita growth, resulting in a growing gap
with the developed world; and the illicit economy grows dramatically.
Governance and political leadership are weak at both the
national and international levels. Internal conflicts
increase, fueled by frustrated expectations, inequities, and
heightened communal tensions; WMD proliferate and are used in
at least one internal conflict.

Scenario Three: Regional Competition
Regional identities sharpen in Europe, Asia, and the Americas,
driven by growing political resistance in Europe and East Asia
to US global preponderance and US-driven globalization and each
region's increasing preoccupation with its own economic and political
priorities. There is an uneven diffusion of technologies,
reflecting differing regional concepts of intellectual property
and attitudes towards biotechnology. Regional economic
integration in trade and finance increases, resulting in both
fairly high levels of economic growth and rising regional competition.
Both the state and institutions of regional governance
thrive in major developed and emerging market countries, as governments
recognize the need to resolve pressing regional problems and
shift responsibilities from global to regional institutions.
Given the preoccupation of the three major regions with their
own concerns, countries outside these regions in Sub-Saharan
Africa, the Middle East, and Central and South Asia have few
places to turn for resources or political support. Military conflict
among and within the three major regions does not materialize,
but internal conflicts increase in and around other countries
left behind.

Scenario Four: Post-Polar World
US domestic preoccupation increases as the US economy
slows, then stagnates. Economic and political tensions with Europe
grow, the US-European alliance deteriorates as the United States
withdraws its troops, and Europe turns inward, relying on its
own regional institutions. At the same time, national governance
crises create instability in Latin America, particularly in Colombia,
Cuba, Mexico, and Panama, forcing the United States to concentrate
on the region. Indonesia also faces internal crisis and risks
disintegration, prompting China to provide the bulk of an ad
hoc peacekeeping force. Otherwise, Asia is generally prosperous
and stable, permitting the United States to focus elsewhere.
Korea's normalization and de facto unification proceed, China
and Japan provide the bulk of external financial support for
Korean unification, and the United States begins withdrawing
its troops from Korea and Japan. Over time, these geostrategic
shifts ignite longstanding national rivalries among the Asian
powers, triggering increased military preparations and hitherto
dormant or covert WMD programs. Regional and global institutions
prove irrelevant to the evolving conflict situation in
Asia, as China issues an ultimatum to Japan to dismantle its
nuclear program and Japaninvoking its bilateral treaty
with the UScalls for US reengagement in Asia under adverse
circumstances at the brink of a major war. Given the priorities
of Asia, the Americas, and Europe, countries outside these regions
are marginalized, with virtually no sources of political or financial
support.

Generalizations Across the Scenarios
The four scenarios can be grouped in two pairs: the first pair
contrasting the "positive" and "negative"
effects of globalization; the second pair contrasting intensely
competitive but not conflictual regionalism and the descent into
regional military conflict.

In all but the first scenario, globalization does not create
widespread global cooperation. Rather, in the second scenario,
globalization's negative effects promote extensive dislocation
and conflict, while in the third and fourth, they spur regionalism.

In all four scenarios, countries negatively affected by population
growth, resource scarcities and bad governance, fail to benefit
from globalization, are prone to internal conflicts, and risk
state failure.

In all four scenarios, the effectiveness of national, regional,
and international governance and at least moderate but steady
economic growth are crucial.

The National Intelligence Council (NIC) manages the Intelligence
Community's estimative process, incorporating the best available
expertise inside and outside the government. It reports to the
Director of Central Intelligence in his capacity as head of the
US Intelligence Community and speaks authoritatively on substantive
issues for the Community as a whole.